Suppose Argyle Sachs Has to Choose Between Building a Smaller

question 303

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:

Barium Enema

A diagnostic medical imaging procedure used to examine the interior of the colon by filling it with a barium sulfate contrast material.

Small Lesions

Minor or small areas of damaged tissue or abnormality in the body.

Barium Swallow

A radiologic procedure that involves oral administration of a barium sulfate drink to help diagnose and evaluate obstructions, ulcers, polyps, diverticuloses, tumors, or motility problems of the esophagus, stomach, duodenum, and small intestine; also called an upper GI (gastrointestinal) series.

Upper GI Series

A series of X-rays of the esophagus, stomach, and small intestine that uses a contrast material to diagnose problems in the upper gastrointestinal tract.