Suppose One Firm Buys Cattle to Process Only the Skins

question 118

Multiple Choice

Suppose one firm buys cattle to process only the skins for leather, and another firm buys cattle to process only the meat for food. If the two firms merged, they would experience

• A)increasing returns.
• B)economies of scale.
• C)economies of scope.
• D)increasing marginal product.
• E)decreasing marginal cost.

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Definitions:

For-Profit Corporations

Businesses that aim to generate profit for their owners and shareholders.

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Organizations established by a government to carry out specific functions or provide services on behalf of the government.

Volunteer Workers

Individuals who freely offer their time and skills to undertake tasks or provide services for charitable, nonprofit, or community groups without monetary compensation.

Narrow Mission

A clearly defined, focused purpose or objective of an organization, which directs its activities and priorities in a specific, targeted manner.