Suppose Argyle Sachs has to choose between building a smaller sweater factory and a larger sweater factory.In the following graph,the relationship between costs and output for the smaller factory is represented by the curve ATC₁,and the relationship between costs and output for the larger factory is represented by the curve ATC₂. a.If Argyle expects to produce 3 600 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain.
b.If Argyle expects to produce 5 000 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain.
c.If the average cost of producing sweaters is lower in the larger factory when Argyle produces 6 500 sweaters per week,why isn't it also lower when Argyle produces 4 000 sweaters per week?
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Question

Suppose Argyle Sachs has to choose between building a smaller sweater factory and a larger sweater factory.In the following graph,the relationship between costs and output for the smaller factory is represented by the curve ATC₁,and the relationship between costs and output for the larger factory is represented by the curve ATC₂.

a.If Argyle expects to produce 3 600 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain.
b.If Argyle expects to produce 5 000 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain.
c.If the average cost of producing sweaters is lower in the larger factory when Argyle produces 6 500 sweaters per week,why isn't it also lower when Argyle produces 4 000 sweaters per week?
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Quizplus · Accepted Answer

The Answer of Suppose Argyle Sachs has to choose between building a smaller sweater factory and a larger sweater factory.In the following graph,the relationship between costs and output for the smaller factory is represented by the curve ATC₁,and the relationship between costs and output for the larger factory is represented by the curve ATC₂. a.If Argyle expects to produce 3 600 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain. b.If Argyle expects to produce 5 000 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain. c.If the average cost of producing sweaters is lower in the larger factory when Argyle produces 6 500 sweaters per week,why isn't it also lower when Argyle produces 4 000 sweaters per week? __________________________________________________________________________________________________________________________________________________________________________________________

Suppose Argyle Sachs Has to Choose Between Building a Smaller