In the below problem I have indicated where I need to put answers in bold (?) and one, two, or three factory and the final question at the bottom for the type of factories that are in bold.

I need to make a graph and I have given the labels for the x and y axis according to the graph.

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.)

Average Total Cost

(Dollars per bike)

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 Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is ? per bike.

Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using one, two or three factory?

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 its SRATC curve if it operates one factory (SRATC1SRATC1); use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories (SRATC2SRATC2); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATC3SRATC3). Finally, plot the long-run average total cost (LRATC) 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.

X axis is quantity of bikes

Y axis is average total cost (dollars per bike)

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 bike production.

*Fewer than 300 bikes per month

*More than 400 bikes per month

*Between 300 and 400 bikes per month