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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.
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 Jsing a single manufacturing facility, its factory in town. Recently, management has been considering expanding operations to one or two additional :actories. The following table presents the manufacturer's monthly shortrun 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 (Daffars per scooter) Number of Factories Q = 10D Q = zoo Q = 300 Q = 400 Q = 500 Q = GOD I 360 200 160 240 400 3'20 2 540 300 160 150 300 540 3 3'20 400 240 1-50 200 360 In the foliomng table, indicate whether the long-run average cost curve exhibits economies of scale, constant returns to scale, or o'fseconoma'es of scale for each range of scooter pmo'ucta'on. m Between 300 and 400 scooters per month 0 O O Fewer than 300 scooters per month O O 0 More than 400 scooters per month O O O
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