Firms use multiproduct strategies to diversify for all of the following reasons except
A) smoothing out revenue and earnings flows.
B) reducing the risk of having a single product line.
C) developing economies of scale.
D) gaining exposure to different technologies.

Question

Quizplus · Accepted Answer

Developing economies of scale is not a primary reason for diversification through multiproduct strategies. Economies of scale are achieved through increased production levels of a single product or service, not through diversification into multiple products or services.

Firms Use Multiproduct Strategies to Diversify for All of the Following