If a firm experiences lower average costs of production as a consequence of producing a range of products, the firm is experiencing

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Economies of scope occur when a firm experiences lower average costs of production by producing a range of products rather than specializing in a single product. This is because the firm can share resources (such as marketing, research and development, or production facilities) across different products, leading to cost savings.

If a Firm Experiences Lower Average Costs of Production as a Consequence