Which of the following expressions describes economies of scope? A)AC_A+B│X₁,X₂│ AC_A│X₁,0│ + AC_B│X₂,0│ C)AC_A+B│X₁,X₁│

Question

Which of the following expressions describes economies of scope? A)AC_A+B│X₁,X₂│ < AC_A│X₁,0│ + AC_B│X₂,0│ B)AC_A+B│X₁,X₂│ > AC_A│X₁,0│ + AC_B│X₂,0│ C)AC_A+B│X₁,X₁│ < AC_A│X₁,0│ + AC_B│X₁,0│ D)AC_A+B│X₁,X₂│ = AC_A│X₁,0│ + AC_B│X₂,0│

Quizplus · Accepted Answer

Economies of scope occur when the cost of producing a combination of goods together is less than the cost of producing them separately. Choice A represents this concept by showing that the combined cost of producing goods A and B is less than the sum of the costs of producing goods A and B independently.

Which of the Following Expressions Describes Economies of Scope