Suppose the cost of producing two goods,x and y,can be represented as C = ax + by + cxy.If there are diseconomies of scope,then which of the following must be TRUE? A) a = b B) a + b = -c C) c 0 D) c

Question

Suppose the cost of producing two goods,x and y,can be represented as C = ax + by + cxy.If there are diseconomies of scope,then which of the following must be TRUE?
A) a = b
B) a + b = -c
C) c > 0
D) c < 0

Quizplus · Accepted Answer

Diseconomies of scope occur when the cost of producing goods together is higher than producing them separately. The term $cxy$ represents the interaction between producing goods x and y together. If $c > 0$, it means that producing both goods together increases the total cost, indicating diseconomies of scope.

Suppose the Cost of Producing Two Goods,x and Y,can Be