Are there cost complementaritites in producing products

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Reference no: EM13222444

A multiproduct firm's cost function was recently estimated as
C(Q1, Q2) = 75 - 0.25Q1Q2 + 0.1Q1^2 + 0.2Q2^2

a. Are there economies of scope in producing 10 units of product 1 and 10 units of product 2?

b. Are there cost complementaritites in producing products 1 and 2?

c. Suppose the division selling product 2 is floundering and another company has made an offer to buy the exclusive rights to produce product

How would the sale of the rights to produce 2 change the firm's marginal cost of producing product 1?

Reference no: EM13222444

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