Which type of economies of scope includes shared activities and core competencies?
A) operational economies of scope
B) financial economies of scope
C) anticompetitive economies of scope
D) employee and stakeholder incentives for diversification

Question

Quizplus · Accepted Answer

Operational economies of scope refer to the cost savings that a company can achieve by sharing activities and core competencies across different products or business units. This type of economies of scope is the only one among the given options that includes the concept of shared activities and core competencies. Financial economies of scope, on the other hand, refer to the benefits that arise from the pooling of financial resources, such as reduced cost of capital. Anticompetitive economies of scope refer to the advantages that a dominant firm may have over smaller competitors due to its ability to leverage its market power across multiple products or markets. Employee and stakeholder incentives for diversification are strategies to encourage diversification but not an economic concept.

Which Type of Economies of Scope Includes Shared Activities and Core