The equation below gives the degree of economies of scope (SC) :
where C(Q1) is the cost of producing output
is the cost of producing output Q2, and
is the joint cost of producing both outputs. If SC is negative:
A) there are neither economies nor diseconomies of scope.
B) there are economies of scope.
C) there are diseconomies of scope.
D) there are both economies and diseconomies of scope.
Correct Answer:
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