Managerial Economics (MindTap Course List)
Managerial Economics (MindTap Course List)
4th Edition
ISBN: 9781305259331
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 7, Problem 1MC
To determine

Economies of scope.

Expert Solution & Answer
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Explanation of Solution

The cost of producing these two goods together is less than the total cost incurred for producing these two goods separately. Thus, option ‘c’ is correct.

Economics Concept Introduction

Economies of scope: Economies of scope refers to a situation where the total cost of production decreases if two or more number of goods are produced together rather than being produced separately.

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Consider the following​ statements:   a. Fewer people are employed in Freedonia now than at any time in the past 75 years.   b. The unemployment rate in Freedonia is lower now than it has been in 75 years.Can both of these statements be true at the same​ time? A. ​Yes, these statements can be correct if more people are classified as​ "discouraged workers."B. ​No, these statements cannot be true since unemployment must increase as employment decreases.C. ​Yes, if the number of unemployed decreases more than the number of employed.D. ​Yes, both of these statements can be correct if labor productivity increases.
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