What is the economies of scope character for a firm that has a straight-line product transformation curve? A) Economies of scope (SC 0) B) Diseconomies of scope (SC

Question

What is the economies of scope character for a firm that has a straight-line product transformation curve?
A) Economies of scope (SC > 0)
B) Diseconomies of scope (SC < 0)
C) SC = 0
D) SC = 1

Quizplus · Accepted Answer

A straight-line product transformation curve means that the firm is able to produce a range of products with the same level of efficiency. Therefore, the firm does not experience any economies or diseconomies of scope. The SC value (SC = 0) is equal to the ratio of the cost of producing two products together versus the cost of producing them separately.

What Is the Economies of Scope Character for a Firm