Final answer:
The question involves identifying economies of scale within the context of sailboat production and sail costs as production levels change. Further analysis than what's provided would be necessary to determine if economies of scale are present, as the question only mentions total costs, not average costs per unit. Reference to figures 7.9 and 33.5 indicates how increasing the scale of production generally results in lower average costs, illustrating economies of scale.
Step-by-step explanation:
The question posed relates to the concept of economies of scale as illustrated by the rising production levels and the associated costs in sailboat manufacturing. When Riggs Company increases its output of sailboats from 1,280 to 1,600, the cost for sails also increases, but this scenario needs to be analyzed to determine if it reflects economies of scale. Typically, economies of scale are observed when increasing the quantity of production leads to lower average costs. However, the detail provided in the question does not specify the average cost changes, only the total cost, so further information would be needed to assess economies of scale.
For example, looking at Figure 7.9 in the reference, it is demonstrated that a small-sized factory like S producing 1,000 alarm clocks has a higher average cost than a medium-sized factory M producing 2,000 alarm clocks, which in turn has a higher cost than large factory L producing 5,000 clocks. As production scales up, the average cost per unit tends to decrease, which is the essence of the economies of scale. Similarly, Figure 33.5 illustrates how production plants S, M, L, and V have differing costs of production due to the scale of their operations, showing economies of scale up to a certain point.