On the following graph, plot the three short-run average total cost curves (SRATC) for Ike's Bikes from the previous table. Specifically, use thegreen points (triangle symbol) to plot its short-run average total cost if it operates one factory (SRATC₁); use the purple points (diamond symbol) toplot its short-run average total cost if it operates two factories (SRATC₂); and use the orange points (square symbol) to plot its short-run averagetotal cost if it operates three factories (SRATC3). Finally, plot the long-run average cost curve (LRAC) for Ike's Bikes using the blue points (circlesymbol).Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.COST PER BIKE (Dollars)8007206405604804003202401608000100200300400500QUANTITY OF OUTPUT (Bikes)O Fewer than 300 bikes per monthMore than 400 bikes per month600Between 300 and 400 bikes per month700SRATC,SRATC₂2SRATCIn the long run, over which range of output levels does Ike's Bikes experience constant returns to scale?LRAC Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expandingproduction to two or even three factories. The following table shows the company's short-run average total cost each month for various levels ofproduction if it uses one, two, or three factories. (Note: Qequals the total quantity of bikes produced by all factories.)Number of Factories Q = 100440123580720Q = 200320400480Average Total Cost(Dollars per bike)Q = 300 Q = 400240320240320240240Q= 500480400320Q = 600720580440Suppose Ike's Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost isper bike.Suppose Ike's Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikesusing

Diseconomies of scale is when the the increase in production leads to increase in average total…

Ike's Bikes 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 each month for various levels of production if it uses one, two, or three factories. (Note: Qequals the total quantity of bikes produced by all factories.) Number of Factories Q = 100 440 1 2 3 580 720 Q = 200 320 400 480 Average Total Cost (Dollars per bike) Q = 300 Q = 400 240 320 240 320 240 240 Q = 500 480 400 320 Q = 600 720 580 440 Suppose Ike's Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost is per bike. Suppose Ike's Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using

Ike's Bikes 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 each month for various levels of production if it uses one, two, or three factories. (Note: Qequals the total quantity of bikes produced by all factories.) Number of Factories Q = 100 440 1 2 3 580 720 Q = 200 320 400 480 Average Total Cost (Dollars per bike) Q = 300 Q = 400 240 320 240 320 240 240 Q = 500 480 400 320 Q = 600 720 580 440 Suppose Ike's Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost is per bike. Suppose Ike's Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose that for a company manufacturing calculators, the cost, revenue, and profit equations are given by x² C = 70,000 + 30x, R=200x - A) Costs are increasing at the rate of $ (Simplify your answer.) where the production output in 1 week is x calculators. If production is increasing at a rate of 600 calculators per week when production output is 5,000 calculators. Find the rate of increase (decrease) in cost, revenue, and profit. B) Revenue is decreasing at the rate of $ (Simplify your answer.) C) Profits are (Simplify your answer.) 20 at the rate of $ P=R-C per week at this production level. per week at this production level. per week at this production level.
Consider an airline's decision about whether to cancel a particular flight that hasn't sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Total Cost Number of Passengers (Dollars per flight) 40,000 10 60,000 20 65,000 30 68,000 40 70,000 50 71,000 60 72,500 70 73,500 80 74,000 90 74,300 100 74,500 Given the information presented in the previous table, the fixed cost to operate this flight is s At each ticket price, a different number of consumers will be willing to purchase tickets for this flight. Assume that the price of a flight is fixed for the duration of ticket sales. Use the previous table as well as the following demand schedule to complete the questions that follow. Price Quantity Demanded (Dollars per ticket) (Tickets per flight) 1,000 700 30 400 90 200 100
To produce the next popular toy, a company has to pay a factory $250, 000 to set up the production line. They also have to pay $25 per item for the raw materials and labor. Write function for the average cost to produce x items. Then describe what happens to the average cost as the factory produces a large number of toys.
A firm has the production function f(X, Y) = x²/2 y1/2, where X is the amount of factor x used and Y is the amount of factor y used. On a diagram we put X on the horizontal axis and Y on the vertical axis. We draw some isoquants. Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant, the isoquant has a slope of -3. The straight line we drew Select one: O a. is vertical. b. is horizontal. c. is a ray through the origin with slope 3. d. is a ray through the origin with slope 4. O e. has a negative slope.
Consider a short-run production process for which APL(10)= 7 and MPL(10)=12. (meaning of notation: average product of labor when employing 10 units of labor is 7; marginal product of labor when employing 10 is 12). Will APL(11) be larger or smaller than APL(10) for this process? Please provide explanation too
suppose a company has two production facilities with two different TC functions. in facility A total costs are given by $600,000+0.4Q^2 in facility B total costs are given by $300,000+0.5Q^2 The firm needs to produce 900 units how many units should they produce in facilities a and b to minimize total costs
The Nike accounting firm analyzes the price-demand relationship toconclude that x thousand shoes will sell if offered for a unit price (in dollars) of p(x) = 130−0.1x. Suppose further that the total cost of production was tracked to be $530,000 up until production of the first thousand shoes, and that this cost increased linearly to $560,000 by the time of production ofthe 2000th shoe. Find the following quantities, and interpret your results(describe what these quantities represent). a) Marginal revenue when x= 100 b) Average profit when x= 500
Businesses wanted to reduce their cost to the minimum without compromising the product quality and violating laws. The total fixed cost decreases if the output increases. Thus the business is left with the variable cost to manage. Notably, the concept of the economies of scale also works for the government, non-profit organizations and individuals. The entity becomes more efficient as it produces more output and reduces cost as a result. The organization can benefit from the economics of scale, consequently, the consumers enjoy lower prices, and the economy expands to increase more demand. For huge businesses, economies of scale provide a competitive advantage over small enterprises. There are two types of economies of scale. The cost that the management can control is internal, while the cause for the cost to decrease attributed to geographic location, government policies, and industry changes are externals. Typically the internal economy of scale is found in large businesses as a…
Question 2: This question refers to a firm's production and profit maximization in the long-run. The firm's cost function is: TC = 20E + 100K. 2.a) In the graph below, plot the firm's isocost line representing total costs of $120,000. Indicate on the figure the value of the isocost's slope. Also indicate where the isocost line intersects with the horizontal and the vertical axes. K E 2.b) The firm is considering producing a total of 200 units. If the firm wants to minimize the cost of producing this level of output, what must the marginal rate of technical substitution be?
For its current level of production, a firm is attempting to minimize its costs. The firm has determined that the marginal product of labor is 10, the marginal product of capital is 20 and the cost per unit of labor is $5, whereas the cost per unit of capital is $10. To minimize cost for the given output the firm should Increase the amount of capital and decrease the amount of labor Leave the amount of capital and labor as they are Decrease the amount of capital and increase the amount of labor
: Suppose that the production functions be like as (A) i) Y = X15 X20.5 ii)Y= X10.5 + X20.5 Find MRTS of these functions
Consider a firm that produces a good using capital and labor. We denote by L the quantity of labor and by K the quantity of capital. In the short term, the firm has a fixed amount of capital K. The short-run production function of the firm is given by f (K; L). Graphically, we measure the amount of work on the abscissa and the output on the ordinate. The average product of labor is (a) the slope of the production function. (b) the area that is below the production function. (c) Both of the above answers are correct. (d) None of the above is correct.