Bridget's Brewery can jointly produce dry stout and sweet stout. The cost function for joint production is: C_D_,_S( q₁, q₂) = 6q₁ + 8 q₂ - 10 q₁^1/3 q₂^1/3, where q₁ is the quantity of dry stout and q₂ is the quantity of sweet stout that Bridget produces. If the brewery produces dry stout alone, the firm's cost function is: C_D ( q₁) = 6 q₁. If the brewery produces sweet stout alone, the cost function is:
C_S (q₂) = 8 q₂. Calculate Bridget's degree of economies of scope if she produces 27 units of dry stout and 64 units of sweet stout.

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The Answer of Bridget's Brewery can jointly produce dry stout and sweet stout. The cost function for joint production is: C_D_,_S( q₁, q₂) = 6q₁ + 8 q₂ - 10 q₁^1/3 q₂^1/3, where q₁ is the quantity of dry stout and q₂ is the quantity of sweet stout that Bridget produces. If the brewery produces dry stout alone, the firm's cost function is: C_D ( q₁) = 6 q₁. If the brewery produces sweet stout alone, the cost function is: C_S (q₂) = 8 q₂. Calculate Bridget's degree of economies of scope if she produces 27 units of dry stout and 64 units of sweet stout.

Bridget's Brewery Can Jointly Produce Dry Stout and Sweet Stout