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	440	280	240	320	480	800
2	620	380	240	240	380	620
3	800	480	320	240	280	440

Suppose Ike's Bikes is currently producing 600 bikes per month in its only factory. Its short-run average total cost is (____) per bike.

Suppose Ike's Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using (one/two/three factories).

Answer rating: 100% (QA)

On the following graph plot the three SRATC curves for Ikes Bikes from the previous table Specifical... View the full answer