Average Total Cost ($ per tablet) Q=400 Number of Factories Q=100 Q=200 Q=300 Q=500 Q=600 1 400 300 200 240 300 720 2 540 350 180 160 250 540 720 400 170 160 200 360 e company Ride is a major manufacturer of bicycles. Currently the company produces bikes using only one factory. However it is considering expanding production to two or even three factories. The following table shows the company's short-run average tal cost (SRATC) each month for various levels of production if it uses one two or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve Ride's bikes? Ride experiences economies of scale at any quantity less than 400 bikes. Ride experiences economies of scale at any quantity over 300 bikes. The long-run average total cost of production per bike will be $170 when 300 bikes are produced in the long run. The long-run average total cost of production per bike will be $160 when 400 bikes are produced in the long run.

Average Total Cost ($ per tablet) Q=400 Number of Factories Q=100 Q=200 Q=300 Q=500 Q=600 1 400 300 200 240 300 720 2 540 350 180 160 250 540 720 400 170 160 200 360 e company Ride is a major manufacturer of bicycles. Currently the company produces bikes using only one factory. However it is considering expanding production to two or even three factories. The following table shows the company's short-run average tal cost (SRATC) each month for various levels of production if it uses one two or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve Ride's bikes? Ride experiences economies of scale at any quantity less than 400 bikes. Ride experiences economies of scale at any quantity over 300 bikes. The long-run average total cost of production per bike will be $170 when 300 bikes are produced in the long run. The long-run average total cost of production per bike will be $160 when 400 bikes are produced in the long run.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 6E

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Question

Average Total Cost ($ per tablet)
Number of Factories
Q=100
Q=200
Q=300
Q=400
Q=500
Q=600
1
400
300
200
240
300
720
540
350
180
160
250
540
3
720
400
170
160
200
360
The company Ride is a major manufacturer of bicycles. Currently the company produces bikes using only one factory. However it is considering expanding production to two or even three factories. The following table shows the company's short-run average
total cost (SRATC) each month for various levels of production if it uses one two or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Refer to the table. Which of the following is NOT true about the long-run average cost curve
of Ride's bikes?
Ride experiences economies of scale at any quantity less than 400 bikes.
Ride experiences economies of scale at any quantity over 300 bikes.
The long-run average total cost of production per bike will be $170 when 300 bikes are produced in the long run.
The long-run average total cost of production per bike will be $160 when 400 bikes are produced in the long run.

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