5. Costs in the short run versus in the long run Scooter's Scooters is a large American manufacturer of electric scooters operating out of Detroit. Currently, the company produces all of its scooters using a single manufacturing facility, its factory in town. Recently, management has been considering expanding operations to one or two additional factories. The following table presents the manufacturer's monthly short-run average total cost (SRATC) for various levels of production if it operates out of one, two, or three factories. (Note: Q equals the total quantity of scooters produced by all factories.) Average Total Cost (Dollars per scooter) Number of Factories Q = 100 Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 1 360 200 160 240 400 720 2 540 300 160 160 300 540 3 720 400 240 160 200 360 Suppose Scooter's Scooters is currently producing 100 scooters per month in its only factory. Its short-run average total cost is $360 per scooter. Suppose Scooter's Scooters is expecting to produce 100 scooters per month for several years. In this case, in the long run, it would choose to produce scooters using one factory Y . On the following graph, plot the three SRA TC curves for Scooter's Scooters from the previous table. Specically, use the green points (triangle symbol) to plot its SRATC curve if it operates one factory (SRATC1 ); use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories (SRATCZ); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATCg). Finally, plot the long- run average total cost (LRATC) curve for Scooter's Scooters using the blue points (circle symbol). On the following graph, plot the three SRATC curves for Scooter's Scooters from the previous table. Specically, use the green points (triangle symbol) to plot its SRATC curve if it operates one factory (SRATC 1 ); use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories (SRATCZ); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATC3). Finally, plot the long run average total cost (LRATC) curve for Scooter's Scooters 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. eoo - A A 720 -- El A E 8 640 SRATC:1 U 0) g 560 0 (I) E B 430 SWXTC2 Q 5 400 U 8 _l I<_: save3 i9 ll g lratc quantity in the following table indicate whether longrun average cost curve exhibits economies of scale constant returns to or diseconomies for each range scooter production. between and scooters per month more than fewer>