Economies of scope is the term used to describe an industry that is composed of firms having substantial economies of scale.

Question

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Economies of scope refer to the cost advantages that arise from producing a variety of products or services, while economies of scale refer to the cost advantages that arise from producing a large quantity of a single product or service. Thus, an industry with economies of scope may have firms producing a variety of products, but not necessarily with substantial economies of scale.

Economies of Scope Is the Term Used to Describe an Industry