3. Costs in the short run versus in the long run 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 shortrun 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.) Average Total Cost (Dollars perbike) Number of Factories Q = 25 Q = 50 Q = 75 Q = 100 Q = 125 Q = 150 1 440 320 240 320 480 ?20 2 580 400 240 240 400 580 3 ?'20 480 320 240 320 440 Suppose Ike's Bikes is currently producing 125 bikes per month in its only factory. Its shortrun average total cost is $ per bike. Suppose Ike's Bikes is expecting to produce 125 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using V . 0n the following graph, plot the three SRATC curves for Ike's Bikes from the previous table. Specically, use the green points { triangle symbol) to plot its SRATC curve if it operates one factory {SRAJC; use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories (SRAIIUg); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (31114303). Finally, plot the longrun average total cost (LRA TC) curve 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. 300 * 720 E w stunt:1 .5 g 560 ' E E E 480 g, SRATCz ,_ '0 400 -I- O (J J 320 f5 SRATC O 3- ' 24D LU + (D it E 15 LRATC E 30 D O 25 50 75 100 125 150 1?5 QUANTITY (Bikes) In the following table, indicate whether the longrun average cost curve exhibits economies of scale, constant returns to scale, or diseconomies of scale for each range of bike production. Range Economies of Scale Constant Returns to Scale Diseoonomies of Scale Fewer than ?5 bikes per month 0 O 0 More than 100 bikes per month 0 O 0 Between 7'5 and 100 bikes per month 0 O O