Economies of ______ occur when a single firm can produce two products together for a lower total cost than two firms could produce those same products separately, one at each firm.
A)scale.
B)scope.
C)efficiency.
D)output.

Question

Quizplus · Accepted Answer

Economies of scope occur when producing two products together is cheaper than producing them separately. This can be achieved by sharing resources, such as machinery or employees, to produce both products at a lower cost than producing each product separately at different firms. Economies of scope refer to the cost savings achieved by producing multiple products or services together. In this scenario, a single firm can produce both products for a lower cost than two separate firms producing each product individually. Scale refers to the cost savings achieved by producing more of a single product, efficiency refers to reducing waste in the production process, and output refers to the amount produced.

Economies of ______ Occur When a Single Firm Can Produce