Asked by Celina Singh on Jul 07, 2024
Verified
Economies of scope exist when a firm saves money by ________.
A) using a resource in multiple activities
B) assessing the customer value chain
C) merging with a smaller firm
D) selling products globally
Economies of Scope
Cost advantages that a business experiences when it increases the variety of products or services it offers.
Customer Value Chain
A series of steps a company takes to deliver a product or service to the customer, focusing on adding value at each stage to meet customer needs.
Selling Products Globally
The process of marketing and distributing goods or services outside of the company's home country, often involving considerations of cultural differences, legal requirements, and logistics.
- Understand how firms can save money by applying economies of scope.
Verified Answer
PG
Peyton GrahamJul 08, 2024
Final Answer :
A
Explanation :
Economies of scope refer to the cost advantages that a business experiences when it produces multiple products or offers a variety of services using the same resources. By using a resource in multiple activities, a firm can achieve economies of scope and reduce its costs. The other choices (assessing the customer value chain, merging with a smaller firm, and selling products globally) do not necessarily create economies of scope.
Learning Objectives
- Understand how firms can save money by applying economies of scope.