please answer 5 5. Consider Table 1 below. A car company is considering changing

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please answer 5

5. Consider Table 1 below. A car company is considering changing its plant size, so it calculates the long-run average total cost of production for various plant sizes below, A through H. For what output range is the car company 1.experiencing economies of scale? 2. Diseconomies of scale 3. Constant returns to scale in this each case and why? Plant Size Long Run Average total cost Quantity $10,000 $9,500 $9,000 $8,800 $8,500 $8,500 $9,200 $10,500 100 200 300 400 500 600 700 800 A(Smallest) HLargest) 6. What is outsourcing of labor and why do you outsourcing is a benefit for one country and a determent for another country?

Explanation / Answer

Note that

Hence we have Economies of scale for Q = 100 to Q = 500, constant returns from Q = 500 to Q = 600 and diseconomies of scale for Q = 600 onwards

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