Suppose Argyle Sachs Has to Choose Between Building a Smaller

question 86

Essay

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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Definitions:

Pain Scale

A tool used by healthcare providers to help assess a patient's pain intensity or changes in pain.

Diaphoresis

Excessive sweating, often a physiological response to stress, physical exertion, or a medical condition.

Primary Care Provider

A healthcare professional who serves as the first point of contact in the health system, offering comprehensive and continuous care for various health issues.

Temperature Change

Variation in temperature over time, which can affect climates, environments, and physical states of matter.