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Today we are going to come up with new task, that is about ”5. Costs in the short run versus in the long run Ike’s Bikes is a major…“. We have found the solution to this question, along with interesting information related to it, thanks to its novelty and interest. This is where we will focus to gain this useful and new knowledge!
Question: “5. Costs in the short run versus in the long run Ike’s Bikes is a major…”
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Answer: “5. Costs in the short run versus in the long run Ike’s Bikes is a major…”
Suppose Ike’s bikes…… $ 360 per bike.
Suppose Ike’s bikes…….. using one factory.
More than 400 bikes per month: diseconomies of scale.
Fewer than 300 bikes per month: economies of scale.
Between 300 and 400 bikes per month: constant returns to scale.
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Relevant knowledge
The average total cost is the amount of total production costs a firm incurs. A firm that produces at the lowest average total cost will maximize its profits over the long-term. When choosing its size, the firm should select the one that will have the lowest average total cost.
Conclusion
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