Economies of scope and economies of scale both relate to lower average cost but

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantage obtained from producing a higher volume of a single product, while economies of scope refer to the cost advantage obtained from spreading a common cost over multiple products. Both types of economies can lead to lower average costs for a business, but they achieve this in different ways. Therefore, both options A and B are correct, making choice C the best answer.

Economies of Scope and Economies of Scale Both Relate to Lower