Company short-run average total cost

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Reference no: EM131095406

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.) Number of Factories Average Total Cost (Dollars per bike) Q=100 Q=200 Q=300 Q=400 Q=500 Q=600 1 260 200 160 200 280 400 2 330 240 160 160 240 330 3 400 280 200 160 200 260 Suppose Ike’s Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $ per bike. Suppose Ike’s Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using.

Reference no: EM131095406

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