Producing more than one product and lowering the cost of production of all products is best known as ________.
A) experience curve effects
B) diseconomies of scale
C) economies of scope
D) virtuous circles

Question

Quizplus · Accepted Answer

Economies of scope refer to the cost savings a firm achieves by producing multiple products simultaneously. By producing more than one product, the firm can take advantage of shared resources, such as production facilities and distribution networks, which lowers the overall cost of production for all products. The other options are not applicable in this scenario: experience curve effects refer to the reduction in cost that occurs as a result of accumulated experience in a particular area; diseconomies of scale occur when a firm becomes too large and inefficient to continue benefiting from scale; and virtuous circles refer to the process by which positive outcomes create a cycle of further positive outcomes.

Producing More Than One Product and Lowering the Cost of Production