5. 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 short-run 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.) Number of Factories Q100 Average Total Cost (Dollars per bike) Q = 150 Q = 200 80 120 80 80 Q = 50 180 270 1 100 Q = 250 200 Q=300 360 2 150 200 150 270 3 360 120 80 100 180 Suppose Ike's Bikes is currently producing 50 bikes per month in its only factory. Its short-run average total cost is 5 per bike Suppose Ike's Bikes is expecting to produce 50 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using On the following graph, plot the three SRATC curves for Ike's Bikes from the previous table. Specifically, use the green points (triangle symbol) to plot IES SRATC curve it it operates one factory (SRATC); 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 plotits SRATC curve il it operates three factories (SRATC). Maly, plot the long-run average total cost (LRATC) curve for the's bikes using the blue points (circle symbol). Note: Plot your points in the order in which you would like the connected. Line segments will connect the points automatically Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 400 360 320 SRATC 280 240 SRATC AVERAGE TOTAL COST (Dollars per bike) 200 180 SRATC 120 80 LRATC 40 0 0 50 100 250 300 350 150 200 QUANTITY (Bikes) In the following table, indicate whether the long-run average cost curve exhibits economies of scale, constant returns to scale, or diseconomie scale for each range of bike production Range Economies of Scale Constant Returns to Scale Diseconomies of Scale Fewer than 150 bikes per month More than 200 bikes per month Between 150 and 200 bikes per month