Economies of Scope Flashcards
1
Q
What do economies of scope mean?
A
It means more variety is cheaper
2
Q
When do they arise?
A
When a business produces multiple products instead of one
3
Q
Why is it cheaper for one biz to produce many products?
A
Because the biz already has the infrastructure set up. They only need to expand production department and nothing else
4
Q
What do economies of scope allow a business to do?
A
Charge lower prices due to lower unit costs. Giving competitive advantage
