4. Costs in the short run versus the long runIke's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is consideringexpanding production to two or even three factories. The following table shows the company's short-run average cost each month for variouslevels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.)Number of Factories123Q = 100440580720Q = 200320400480Average Cost(Dollars per bike)Q = 300Q = 400240320240240320240Q = 500480400320Q = 600720580440Suppose Ike's Bikes is currently producing 600 bikes per month in its only factory. Its short-run average cost is $per bike.Suppose Ike's Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to producebikes using

Costs refer to the expenses that are incurred in the process of production of goods or services.…

Number of Factories 1 2 3 Q = 100 440 580 720 Q = 200 320 400 480 Average Cost (Dollars per bike) Q = 300 Q = 400 240 320 240 240 240 320 Q = 500 480 400 320 Q=600 720 580 440 Suppose Ike's Bikes is currently producing 600 bikes per month in its only factory. Its short-run average cost is $ per bike. Suppose Ike's Bikes is expecting to produce 600 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using