Module Five Quiz X Back to Assignment Attempts Keep the Highest / 3 6. Firm's Costs 2 Consider the following cost information for a pizzeria: Quantity Total Cost Variable Cost (Dozens of pizzas) (Dollars) (Dollars) 0 280 0 320 40 N 350 70 W 380 100 A 420 140 470 190 530 250 The pizzeria's fixed cost is $Module Five Quiz X Attempts Keep the Highest / 4 3. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Average Total Cost (Dollars per bike) Number of Factories Q = 100 Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 360 200 160 240 400 720 540 300 160 160 300 540 W N 720 400 240 160 200 360 Suppose Ike's Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost is |$ per bike. Suppose Ike's Bikes is expecting to produce 600 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 its SRATC curve if it operates one factory (SRATC ); use the purple points (diamond symbol) to plot its SRATC curve if it operates two factories (SRATC2); and use the orange points (square symbol) to plot its SRATC curve if it operates three factories (SRATC;). 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.Module Five Quiz X ? 800 4 720 640 SRATC 560 480 SRATC2 AVERAGE TOTAL COST (Dollars per bike) 400 O 320 SRATC, 240 160 LRATC 80 0 100 200 300 400 500 600 700 QUANTITY (Bikes) 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. Range Economies of Scale Constant Returns to Scale Diseconomies of Scale Between 300 and 400 bikes per month O O O More than 400 bikes per month O O O Fewer than 300 bikes per month O O OComplete the third column of the following table by calculating the marginal cost per dozen pizzas using the information on total cost. Then complete the final column by calculating the marginal cost per dozen pizzas using the information on variable cost. Quantity Total Cost Marginal Cost Variable Cost Marginal Cost Using Total Cost Using Variable Cost (Dozens of pizzas) (Dollars) (Dollars) (Dollars) (Dollars) 0 280 0 320 40 350 70 W N 380 100 420 140 UT 470 190 530 250 True or False: It doesn't matter whether you compute marginal cost using total cost or variable cost. O True O False Grade It Now Save & Continue Continue without saving