ABC Co Produces Only Gadgets, and XYZ Co

question 105

Multiple Choice

ABC Co. produces only gadgets, and XYZ Co. produces both gadgets and widgets. If ABC Co. produces gadgets at the same average total cost as XYZ Co., economies of:

• A) scope are present in ABC.
• B) scale are present in ABC.
• C) scale are not present in XYZ.
• D) scope are not present in XYZ.

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Definitions:

Normal Good

A type of good for which demand increases as the consumer's income increases and decreases as the consumer's income decreases.

Temporary Weather Fluctuations

Short-term changes in weather patterns, which may impact various aspects of daily life and economic activities.

Car Transactions

Refers to the buying, selling, or trading of automobiles between parties.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level in a given period.