Competing in multiple markets allows firms to __________.

Question

Quizplus · Accepted Answer

Competing in multiple markets enables firms to spread their costs across more units in various product categories, reducing their average cost of production in the long run. This spreading of costs provides economies of scope to the firm, which can further enhance its profitability. However, avoiding economies of scale, i.e., scaling back production to reduce unit costs, is not a benefit of competing in multiple markets.

Competing in Multiple Markets Allows Firms to __________