Suppose Argyle Sachs Has to Choose Between Building a Smaller

question 34

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?

---

Definitions:

Mechanoreceptors

Sensory receptors in the body that respond to mechanical pressures or distortions, such as touch, pressure, stretch, and vibration.

Chemoreceptors

Sensory receptors that respond to chemical stimuli, found in various locations in the body and involved in processes like taste, smell, and respiratory control.

Dementia

A chronic or progressive syndrome marked by the deterioration of cognitive function, affecting memory, thinking, orientation, comprehension, calculation, learning capacity, language, and judgment.

Agitated

A state of increased restlessness or excitement, often displaying as physical or verbal outbursts, which can indicate distress or discomfort.