How the firms produce the goods q1and q2 separately

Reference no: EM13232857

Two firms currently produce the goods q1and q2 separately. Their cost functions are C(q1) =25 + q1, and C(q2) = 35 + 2q2. By merging, they can produce the two goods jointly with costs described by the cost function C(q1, q2) = 45 + q1+ q2. Are there scope economies in
this case that would justify the merger?

Reference no: EM13232857

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