Ike’s Bikes is a major manufacturer of bic…


Question Description:

25

Ike’s Bikes is a major manufacturer of bic… 2 answers below » Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes in 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 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.)
Number of Factories Q=100 Q=200 Q=300 Q=400 Q=500
1 320 240 240 360 560
2 480 320 240 320 480
3 560 360 240 240 320

Suppose Ike’s Bike is currently producing 500 bikes per month in ist ( View complete question » Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes in 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 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.)
Number of Factories Q=100 Q=200 Q=300 Q=400 Q=500
1 320 240 240 360 560
2 480 320 240 320 480
3 560 360 240 240 320

Suppose Ike’s Bike is currently producing 500 bikes per month in ist (only) factory. Its short-run average total cost is _____per bike?
Suppose Ike’s Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long-run, it would choose to produce bikes using _______? View less » Aug 21 2012 12:52 PM

Answer

25