The following table shows the company's short-run average total cost each month for various levels of production if it uses 1,2, or 3 factories. (Q = quantity of bikes)
# of factories______Average Total Cost
_________Q=100 Q=200 Q=300 Q=400 Q=500
1_________560___420___420___630___980
2_________840 ___560___420___560___840
3_________980___630___420___420___560
Suppose Ike’s factory is expected to produce 500 bikes per month for several years. In this case, in the long-run, it would choose to produce bikes using ___ 1/2/3 factories___???
I understand the short-run questions which I already answered for my hw. I am just confused with the long-run. I don't understand how it works and therefore, how many factories should Ike use in the question above. Please help. I would really appriciate it
# of factories______Average Total Cost
_________Q=100 Q=200 Q=300 Q=400 Q=500
1_________560___420___420___630___980
2_________840 ___560___420___560___840
3_________980___630___420___420___560
Suppose Ike’s factory is expected to produce 500 bikes per month for several years. In this case, in the long-run, it would choose to produce bikes using ___ 1/2/3 factories___???
I understand the short-run questions which I already answered for my hw. I am just confused with the long-run. I don't understand how it works and therefore, how many factories should Ike use in the question above. Please help. I would really appriciate it