Two firms, each producing different goods, can achieve a greater output than one firm producing both goods with the same inputs. We can conclude that the production process involves:
A) diseconomies of scope.
B) economies of scale.
C) decreasing returns to scale.
D) increasing returns to scale.

Question

Quizplus · Accepted Answer

Diseconomies of scope occur when it's less efficient for a firm to produce multiple products together than to produce them separately, which aligns with the scenario described.

Two Firms, Each Producing Different Goods, Can Achieve a Greater