Cogswell Cogs Can Jointly Produce Cogs or Rotors

question 68

Essay

Cogswell Cogs can jointly produce cogs or rotors.The joint cost function is:
C_C,R(q₁,q₂)= 35q₁ + 12q₂ + 100 ,
where q₁ is the number of cogs and q₂ is the number of rotors Cogswell produces.If Cogswell produces cogs alone,the cost function is:
C_C(q₂)= 35q₁ .If Cogswell produces rotors alone,the cost function is: C_R(q₂)= 12q₂.Calculate Cogswell's degree of economies of scope if he produces 64 cogs and 16 rotors.

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Definitions:

Indefinitely

Indefinitely means for an unspecified or unlimited duration, often indicating a period without a foreseeable end.

Last Dividend

The most recent distribution of company earnings to shareholders, expressed as a dollar per share value.

Preferred Stock

A class of ownership in a corporation with a fixed dividend that has priority over common stock dividends but typically does not have voting rights.

Par Value

The nominal or face value of a bond, share, or coupon as stated by the issuer.