Q Sear Chapter 14 Homework 5. Costs in the short run versus in the long run y Tools Scooter's Scooters is a large American manufacturer of electric scooters operating out of Grand Rapids. 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.) Ips Average Total Cost (Dollars per scooter) Number of Factories Q = 50 Q = 100 Q = 150 Q = 200 Q = 250 Q = 300 220 140 120 160 240 400 310 190 120 120 190 310 N m 400 240 160 120 140 220 Suppose Scooter's Scooters is currently producing 300 scooters per month in its only. factory. Its short-run average total cost is $400 per scooter Suppose Scooter's Scooters is expecting to produce 300 scooters per month for several years. In this case, in the long run, it would choose to produce scooters using three factories 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 (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 (SRATC3). 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. MacBook Air O de LO CO # m O m . . Y I LL 1 Z > XCENGAGE | MINDTAP Chapter 14 Homework 400 4 SRATC SRATC2 AVERAGE TOTAL COST (Dollars per scooter) SRATC 3 LRATC o 50 100 150 200 250 300 350 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 150 and 200 scooters per month O O O Fewer than 150 scooters per month O O O More than 200 scooters per month . O Grade It Now Save & Continue Continue without saving MacBook Air * CO ~ O de LO