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Production having Two Outputs -Economies of Scope
* Economies of scope exist when joint output of a single firm is greater than the output which could be achieved by two different firms each of them producing a single output.
* Examples:
-The farm of chicken produces poultry and eggs
- Automobile produces cars and trucks
- University Teaching and research
* What are advantages of joint production?
-An automobile company producing cars and tractors
* Advantages
1) Both of them use capital and labor.
2) The firms share resources management.
3) Both use the same labor skills and type of machinery.
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