I'm not sure if I am doing this correctly. On the following graph, plot the three short-run average total cost curves (SRATC) for Ike's Bikes from the previous table. Specifically, use the greenpoints (triangle symbol) to plot its short-run average total cost if it operates one factory (SRATC₁); use the purple points (diamond symbol) to plot itsshort-run average total cost if it operates two factories (SRATC₂); and use the orange points (square symbol) to plot its short-run average total costif it operates three factories (SRATC3). Finally, plot the long-run average total cost (LRATC) for Ike's Bikes using the blue points (circle symbol).Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.AVERAGE TOTAL COST (Dollars per bike)400360320280240200160120804000100200400500300QUANTITY OF OUTPUT (Bikes)More than 400 bikes per monthO Between 300 and 400 bikes per month600Fewer than 300 bikes per month700SRATC₁SRATC2SRATC3In the long run, over which range of output levels does Ike's Bikes experience economies of scale?ouLRATC 10. Costs in the short run versus in the long runIke'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: Q equals the total quantity of bikes produced by all factories.)Number of Factories Q = 100 Q = 20014060110160123230320Average Total Cost(Dollars per bike)Q = 300Q = 400408040404080Q = 50016011060Q = 600320230140Suppose Ike's Bikes is currently producing 500 bikes per month in its only factory. Its short-run average total cost is$160 per bike.Suppose Ike's Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikesusing one factory

Given information: Ike Bikes is a manufacturer of bikes, currently producing bikes in its only one…

ke'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: Q equals the total quantity of bikes produced by all factories.)

ke'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: Q equals the total quantity of bikes produced by all factories.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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