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Economies of Scale for LRATC

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1.
a. Using the data below, construct a worksheet which demonstrates a typical long run average cost curve (LRATC) for a production process that shows economies of scale, constant returns and diseconomies of scale.
Q LRATC
0 $120
10 $107
20 $95
30 $85
40 $76
50 $69
60 $63
70 $60
80 $60
90 $60
100 $60
110 $60
120 $61
130 $64
140 $68
150 $75
160 $83
170 $94
180 $109
b. Construct a line chart for the LRATC. Use the quantity (Q) data for the X-axis.
c. Over what range of output does this firm experience: (a) economies of scale; (b) constant returns; and (c) diseconomies of scale?

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