Explore BrainMass
Share

Explore BrainMass

    Economies of Scale for LRATC

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com October 10, 2019, 7:15 am ad1c9bdddf
    https://brainmass.com/economics/production-function/573840
    $2.19