Aplia Homework: Chapter 13Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.AVERAGE TOTAL COST (Dollars per bike)40036032028024020016012080400050100150200250QUANTITY OF OUTPUT (Bikes)RangeMore than 200 bikes per monthFewer than 150 bikes per monthBetween 150 and 200 bikes per month300350SRATC₁SRATC₂2SRATC3LRATC?Economies of Scale Constant Returns to ScaleDiseconomies of Scale Aplia Homework: Chapter 13AttemptsKeep the Highest / 45. Costs in the short run versus in the long runIke's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expandingproduction to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levelsof 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 =118022703360= 50 Q = 100100150200Average Total Cost(Dollars per bike)Q = 150Q == 20080801201208080= 250 Q = 300360270180200150100Suppose Ike's Bikes is currently producing 50 bikes per month in its only factory. Its short-run average total cost is$180 per bike.Suppose Ike's Bikes is expecting to produce 50 bikes per month for several years. In this case, in the long run, it would choose to produce bikes usingone factoryOn the following graph, plot the three SRATC curves for Ike's Bikes from the previous table. Specifically, use the green points (triangle symbol) to plotits SRATC if it operates one factory (SRATC1), use the purple points (diamond symbol) to plot its short-run average total cost if it operates twofactories (SRATC2), and use the orange points (square symbol) to plot its SRATC if it operates three factories (SRATC3). Finally, plot the long-runaverage total cost (LRATC) for Ike's Bikes 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.

Average total cost is means to as the sum total of all production costs divided by the total…

5. Costs in the short run versus in the long run 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 Q = 50 Q = 100 1 180 2 270 3 360 100 150 200 Average Total Cost (Dollars per bike) Q = 150 Q = 200 80 120 80 80 120 80 . Q = 250 200 150 100 Q = 300 360 270 180 Suppose Ike's Bikes is currently producing 50 bikes per month in its only factory. Its short-run average total cost is $180 per bike. Suppose Ike's Bikes is expecting to produce 50 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using one factory