Calculate the degree of economies of scope and interpret

Assignment Help Business Economics

Reference no: EM13831136

The Johnson Corporation produces 1000 wood cabinets and 500 wood desks per year, for total cost of $30,000. It has been estimated that if the firm produced 1000 wood cabinets only, the cost would be $23,000, and if the firm produced 500 wood desks only, the cost would be $11,000.

Calculate the degree of economies of scope and interpret your findings.

What explains economies of scope and economies of scale in production? What is the difference between economies of scope and economies of scale? Provide at least two examples for each case.

Reference no: EM13831136

Questions Cloud

Difference between a unilateral and bilateral contract : Discuss the difference between a unilateral and bilateral contract. Why is it important to be able to identify which type it is? Give an example of each.

Pay for improvements in education : Economists have estimated that cigarette smoking declines by 4 percent for every 10 percent increase in cigarette price. Several states have increased taxes by 100 percent on cigarettes to pay for improvements in education. Does this policy make sens..

Backward bending income consumption curve : Prove that inferior goods (goods with a negative income effect) have a backward bending income consumption curve. Prove that giffen goods have a positively sloped demand curve and a backward bending price consumption curve. Comment about substitution..

Operates radio and television stations in the midwest : Midwest Media Inc. is a broadcasting firm that owns and operates radio and television stations in the Midwest. The firm is currently considering the purchase of a proximate fast food chain that is experiencing financial difficulty. What recommendatio..

Calculate the degree of economies of scope and interpret : The Johnson Corporation produces 1000 wood cabinets and 500 wood desks per year, for total cost of $30,000. It has been estimated that if the firm produced 1000 wood cabinets only, the cost would be $23,000, and if the firm produced 500 wood desks on..

What is this years rate of inflation : If the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? In contrast, suppose that the CPI was 110 last year and 108 this year. What is this year’s rate of inflation? What term do economics use to describe this second..

Balance the need for scalability against : Your company is bidding on a system design project. It is your job to design the system architecture. How will you balance the need for scalability against the need to keep costs as low as possible to win the bid?

What is the size of labor force-what is unemployment rate : Assume the following data for a country: total population, 500; population under 16 years of age or institutionalized, 120; not in labor force, 150; unemployed, 23; part-time workers looking for full-time jobs, 10. What is the size of the labor force..

Famer develops and patents new method for growing corn : A famer develops and patents a new method for growing corn that decreases the cost of growing corn by $300 per acre. thereby increasing his profits from growing corn. According to ____principle. The farm argues that he should keep the entire $300 per..

User Account

All Pages