you have read the long-run average cost (AC) of operation may decrease forthree reasons.

a. List and explain the three reasons why the log-run unit cost may decrease over time.

b. Suppose that the global learning curve for solar power installation in the US is 93%, bywhatthe percent will the unit cost of solar power production be reduced as a result oflearning?

c. How might the learning curve information help businesses in making operational decision?

d .Explain the concept of economies of scope. Suppose Conner runs two kind of rafting trips. Ifhe spends all day on wild whitewater rafting, he can do 3 trips, or he can do 4 trips of a mellowwildlife rafting. If he does some of each, however, he can do more total trips: 2 white water tripsand 3 wildlife trips. Conner's time is valued at $20/ hour. Finding the value for the economies ofscope of Conner's rafting experience.

What can you say about his economies of scope? i.e., does Conner reduce the average costbymaking some of each trip, or by making each trip separately? Show yourwork