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 Lansing. 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 = 25 Q = 50 Q = 75 Q = 100 Q = 125 Q = 150 1 130 100 80 100 140 200 165 120 80 80 120 165 200 140 100 80 100 130 Suppose Scooter's Scooters is currently producing 25 scooters per month in its only factory. Its short-run average total cost is S per scooter. Suppose Scooter's Scooters is expecting to produce 25 scooters per month for several years. In this case, in the long run, it would choose to produce scooters using one factory On the following three SRATC curves for Scooter's Scooters from the previous table. Specifically, use the green points (triangle two factories symbol) to plot if it operates one factory (SRATC,); use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories ( three factories se the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATOg). Finally, plot the long-run average Love "MATC) 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. Specifically, use the green points (triangle symbol) to plot its SRATC curve if it operates one factory (SRATCy); use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories (SRATC,); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATCy). 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. 200 A 160 SRATC, 140 120 SRATC, AVERAGE TOTAL COST (Dollars per scooter) 100 -0 SRATC, O 40 LRATC 20 25 50 75 100 125 150 175 QUANTITY (Scooters) In the following table, indicate whether the long-run average cost curve exhibits economies of scale, constant returns to scale, or diseconomies of scale for each range of scooter production. Range Economies of Scale Constant Returns to Scale Diseconomies of Scale Between 75 and 100 scooters per month O O Fewer than 75 scooters per month O O O More than 100 scooters per month O O O