Answer to Question #134784 in Economics of Enterprise for Decide Tsakani Nukeri

Question

Capacity level Total product Long-run total cost Long-run average cost
A 15 000 56 500 3.77
B 25 000 80 600 3.22
C 40 000 120 000 3.00
D 55 000 140 000 2.55
E 70 000 168 650 2.41
F 95 000 210 000 2.21
G 120 000 265 200 2.21
H 145 000 320 450 2.21
I 160 000 390 750 2.44
J 185 000 490 340 2.65
K 210 000 590 640 2.81

Use the data provided in the table together with any other calculations you deem
necessary in order to help Thabo to classify the capacity levels into the categories
where Tech World will experience economies of scale, constant returns to scale and
diseconomies of scale. Provide reasons for each of the classifications.

Answer 1

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