Eddys' Electronics found that instead of producing a dvd player and a gaming system separately,it is cheaper to incorporate dvd playing capabilities in their new version of the gaming system.Eddy's is taking advantage of
A)Economies of Scale
B)Learning curve
C)Economies of Scope
D)Decreasing marginal costs

Question

​Eddys' Electronics found that instead of producing a dvd player and a gaming system separately,it is cheaper to incorporate dvd playing capabilities in their new version of the gaming system.Eddy's is taking advantage of
A)​Economies of Scale
B)Learning curve
C)Economies of Scope
D)​Decreasing marginal costs

Quizplus · Accepted Answer

Eddy's Electronics is taking advantage of economies of scope, which refers to the cost savings that occur when a company produces multiple products using the same resources and capabilities. By incorporating dvd playing capabilities in their gaming system, Eddy's is able to reduce production costs and increase efficiency. Economies of scale (A) refer to cost savings that occur when a company produces more of a single product, learning curve (B) refers to the improvement in efficiency that occurs as workers gain experience with a task, and decreasing marginal costs (D) refer to the reduction in average cost that occurs as output increases.

​Eddys' Electronics Found That Instead of Producing a Dvd Player

Eddys' Electronics Found That Instead of Producing a Dvd Player