Bubba Burgers has discovered there are economies of scope available to the restaurant. Which is most likely to be a response to this discovery?
A) Bubba adds more varied inputs to burger production.
B) Bubba expands burger production, focusing on that one good.
C) Bubba contracts burger production.
D) Bubba adds grilled chicken sandwiches to the menu.
E) Bubba cuts back on the diversity of the menu.

Question

Quizplus · Accepted Answer

Economies of scope occur when it is less expensive for a company to produce two or more different products together instead of separately. Adding grilled chicken sandwiches to the menu would increase the variety of products offered and potentially result in cost savings for Bubba Burgers. Therefore, choice D is the best option.

Bubba Burgers Has Discovered There Are Economies of Scope Available