Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is consi production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each mc of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories 1 2 Q=50 Q = 100 140 230 320 60 110 160 Average Total Cost (Dollars per bike) Q = 150 Q = 200 40 40 80 80 40 40 Q=250 Q = 300 160 320 110 230 60 140
Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is consi production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each mc of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories 1 2 Q=50 Q = 100 140 230 320 60 110 160 Average Total Cost (Dollars per bike) Q = 150 Q = 200 40 40 80 80 40 40 Q=250 Q = 300 160 320 110 230 60 140
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.5IP
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