If a pharmaceutical firm is researching ways to improve its heartburn medicine and discovers a technique that will improve its allergy medicine,one could conclude that economies of scope exist in that industry.

Question

Quizplus · Accepted Answer

Economies of scope imply that the cost of producing two goods together is less than the cost of producing them separately.In this case,the costs of producing heartburn medicine and allergy medicine are lower for the firm that produces both.

If a Pharmaceutical Firm Is Researching Ways to Improve Its