A firm finds that it can produce several different goods at a lower average cost by using some of the same production facilities than it could if it produced each of the goods with separate production facilities. This firm is
A) gaining economies of scope.
B) gaining economies of team production.
C) gaining economies of scale.
D) incurring diseconomies of scale.

Question

Quizplus · Accepted Answer

Economies of scope occur when a firm can produce multiple products more cheaply in combination than separately, often by sharing resources or facilities.

A Firm Finds That It Can Produce Several Different Goods