Economies of scope exist when it is cheaper to produce:
A) with a large fixed plant and equipment.
B) at increasing rates of output.
C) given quantities of two different products together than to produce the same quantities separately.
D) given quantities of two different products separately than to produce the same quantities together.
E) using more than one technique.

Question

Quizplus · Accepted Answer

Economies of scope occur when producing two or more different products together is more cost-effective than producing them separately. This is because common resources (such as labor, plant, and equipment) can be shared to reduce overall costs.

Economies of Scope Exist When It Is Cheaper to Produce