Can economies of scope exist in a very small business?
A)No. Only large businesses can be sufficiently large to accrue such benefits
B)Yes. For example, a village shop which is also a post-office
C)It is unlikely that the managers of such a small business would understand the theory enough to apply it
D)Theoretically yes, but they are very rare

Question

Quizplus · Accepted Answer

Economies of scope refer to the cost savings and efficiency gains that arise from producing multiple products or services together. Even a very small business can achieve such benefits by offering a range of related products or services. For example, a village shop that also serves as a post office can save costs by sharing staff, equipment, and space. Therefore, option (B) is correct. Options (A), (C), and (D) are incorrect because they either make broad and incorrect assumptions or lack justification.

Can Economies of Scope Exist in a Very Small Business