Use the following table to work Problems 17 to 20. 1 answer below »

Use the following table to work Problems 17 to 20. The table shows the production function of Jackie’s Canoe Rides.

 

Labor

Output (rides per day)

(workers per day)

Plant 1 Plant 2 Plant 3 Plant 4

10

20

40

55

65

20

40

60

75

85

30

65

75

90

100

40

75

85

100

110

Canoes

10

20

30

40

Jackie’s pays $100 a day for each canoe it rents and $50 a day for each canoe operator it hires.

. Graph the ATC curves for Plant 1 and Plant 2. Explain why these ATC curves differ.

. Graph the ATC curves for Plant 3 and Plant 4. Explain why these ATC curves differ.

. a. On Jackie’s LRAC curve, what is the average cost of producing 40, 75, and 85 rides a week?

b. What is Jackie’s minimum efficient scale?

2 a. Explain how Jackie’s uses its LRAC curve to decide how many canoes to rent.

b. Does Jackie’s production function feature economies of scale or diseconomies of scale?

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