If the cost of producing two or more outputs jointly is less than the cost of producing the outputs separately, _____.
A) economies of scope are said to exist
B) the ﬁrm's managers would not want to allow portfolio diversiﬁcation
C) economies of scale are said to exist
D) the ﬁrm's shareholders would not want to allow portfolio diversiﬁcation

Question

Quizplus · Accepted Answer

Economies of scope occur when producing a wider variety of goods or services together is more cost-effective than producing each one separately. This concept is distinct from economies of scale, which relate to cost advantages due to increased production volume of a single product.

If the Cost of Producing Two or More Outputs Jointly