Is It Possible to Benefit from Economies of Scope and Economies

question 46

Multiple Choice

Is it possible to benefit from economies of scope and economies of scale simultaneously?

• A)Yes, although in practice one is likely to be more important than the other in a specific firm
• B)Theoretically yes, but the organization would need to be larger than any in existence today
• C)Yes, but you have to achieve one first, then the other
• D)No. They are mutually exclusive

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Definitions:

Mexican Government

The federal constitutional republic of Mexico, which is governed by a president and a bicameral legislature.

Fixed Exchange-Rate System

An exchange rate regime where a country's currency value is pegged to another currency, a basket of currencies, or a commodity like gold.

Local Currency

The currency that is legally accepted within a country and typically used for all financial transactions within that geographical boundary.

Flexible Exchange Rates

A system where the value of a currency is determined by the foreign exchange market, depending on the supply and demand for that currency.