Suppose Argyle Sachs Has to Choose Between Building a Smaller

question 193

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 3600 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain.
b.If Argyle expects to produce 5000 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 6500 sweaters per week,why isn't it also lower when Argyle produces 4000 sweaters per week?

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Definitions:

Eco-Catastrophe

A major ecological disaster or event that causes significant harm to the environment and living organisms.

Bats

Flying mammals known for their echolocation capability, playing crucial roles in pollination, seed dispersal, and insect population control.

Extinction

The permanent loss of all members of a species, eliminating its presence from the Earth.

Low Reproduction Rate

refers to the situation in which a species or population produces offspring at a rate that is lower than the average, often leading to concerns about population sustainability and growth.