Economies of scale and economies of scope

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Reference no: EM131707664

1. Which of the following statements accurately brings out the difference between economies of scale and economies of scope?

A. Economies of scale refer to the decreases in per-unit cost with decreases in output, whereas economies of scope refer to the increases in per-unit cost with increases in output.

B. Economies of scale result in decreasing returns to scale, and economies of scope result in constant returns to scale.

C. Economies of scope are the savings that come from producing two or more outputs from the same resources, whereas economies of scale are decreases in per-unit cost with increases in output.

D. Economies of scope are realized when a firm operates at the minimum efficient scale, whereas economies of scale are realized when the firm operates beyond the minimum efficient scale.

2. Value is determined by the perceived benefits a good or service provides to a(n)

A. manufacturer.

B. buyer.

C. investor.

D. retailer.

3. Diseconomies of scale refer to

A. decreases in cost as profit increases.

B. increases in cost as output increases.

C. increases in economic value as per-unit cost decreases.

D. decreases in profit when consumer demand decreases.

Reference no: EM131707664

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