At the beginning of 2001, Peach Computers competed exclusively in the computer industry and generated approximately 96% of its revenue from the sales of computers and computer-related software and approximately 4% of its revenues were generated from sales of other peripherals. Further, of these revenues, 60% was from sales in the U.S., 30% was from sales in Europe, 7% was from sales in Asia and 3% was from other areas. In October 2001, Peach entered the personal electronics industry by introducing a new MP3 player known as the PeachPit. In developing and selling the PeachPit, Peach Computers was able to use many of the same R&D facilities, suppliers, production facilities, and distribution and sales outlets as the computers and software Peach Computers traditionally sold. By 2003, the PeachPit MP3 Player, accessories for the unit, and sales of songs on Peach Computers' NectarTunes website accounted for 35% of Peach Computers' revenues.
-Which type of economies of scope is Peach Computers experiencing between its units?
A) shared activities
B) core competencies
C) multipoint competition
D) tax advantages

Question

Quizplus · Accepted Answer

Peach Computers is experiencing shared activities economies of scope as they were able to use many of the same resources such as R&D facilities, suppliers, production facilities, and sales outlets for both their computer products and the PeachPit MP3 player.

At the Beginning of 2001, Peach Computers Competed Exclusively in the Computer