A company that produces furniture wax branches out into producing a dusting product like Lemon-Dust-Away. This expansion can be called efficient if the company:

Question

A company that produces furniture wax branches out into producing a dusting product like Lemon-Dust-Away. This expansion can be called efficient if the company:​

Quizplus · Accepted Answer

Economies of scope refer to the cost savings a firm achieves by producing two or more products together rather than separately. In this case, the furniture wax company is producing a dusting product that can be produced using similar equipment and resources as their furniture wax. Therefore, this expansion can be considered efficient because the company is benefiting from economies of scope.

A Company That Produces Furniture Wax Branches Out into Producing