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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.
NETWORK EXTERNALITIES Till this point we have assumed that people's demands for good are independent of each other. Actually, a person's demand can be affected by the number
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