Scenario B.Three students-Bernardo,Astrid,and Rajiv-are discussing how to improve efficiency in a manufacturing context.Bernardo says that the company must work toward achieving lower costs per unit of production.Rajiv believes that the company should use the same resources to make more related products.Astrid holds that avoiding the costs of growing too large and creating waste will improve efficiency.
-When he says that the company should use the same resources to make more related products,Rajiv is calling for

Question

Quizplus · Accepted Answer

Rajiv's suggestion of using the same resources to make more related products is an example of economies of scope, which refers to cost savings achieved by producing related products using the same resources. This is different from economies of scale (choice C) which refers to cost savings achieved by producing larger quantities of the same product. Choices A and B refer to the opposite of economies, which are diseconomies, where costs increase as production increases. Choice E is not a recognized economic concept. Therefore, the best choice is D.