Economies of scope refer to cost savings that arise when the
A) size of financial transactions increase.
B) size of financial transactions decrease.
C) number of different activities undertaken increases.
D) number of different activities undertaken decreases.

Question

Quizplus · Accepted Answer

Economies of scope occur when a firm produces a variety of products or services together, resulting in cost savings. This is because the same resources can be used for multiple activities, reducing costs compared to producing each product or service separately. Therefore, when the number of different activities undertaken increases, economies of scope can be achieved.

Economies of Scope Refer to Cost Savings That Arise When