Asked by Michael Culham on Jun 22, 2024
Verified
A firm that manufactures ________ would most likely gain an economy of scope.
A) limited quantities of products
B) large numbers of products
C) many different products
D) one type of product
Economy of Scope
Cost efficiencies derived from variety, rather than volume, where producing a wider range of products can lead to lower average costs.
Limited Quantities
Refers to the availability of a product being restricted to a certain number, often used as a marketing strategy to increase demand.
Large Numbers
Quantities that are significantly higher than what is typical, often used to denote scale in statistical or numerical contexts.
- Understand the conditions under which economies of scope are likely to be gained.
Verified Answer
JS
James SmithJun 23, 2024
Final Answer :
C
Explanation :
Economy of scope refers to cost savings that a firm can achieve by producing multiple products together rather than producing each product separately. Therefore, a firm that manufactures many different products would most likely gain an economy of scope.
Learning Objectives
- Understand the conditions under which economies of scope are likely to be gained.