Question
The variety of Riverside Ranger logo T-shirts includes 12 different designs. Setup between designs takes one hour (and $25,000), and, after setting up, you can
The variety of Riverside Ranger logo T-shirts includes 12 different designs. Setup between designs takes one hour (and $25,000), and, after setting up, you can produce 1,000 units of a particular design per hour (at a cost of $11,000).
Note: AssumeQdenotes the quantity produced of a particular design.
Which of the following best represents the average cost function for producing any single design?
AC=$25,000+$11
AC=$25,000+$11/Q
AC=$25,000/Q+$11
AC=$25,000+$11,000
Based on this information, production in any one single design(Does not exhibit or exhibit) economies of scale.
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