Producing 200 Units of Good Y and 100 Units of Good

question 111

Multiple Choice

Producing 200 units of good Y and 100 units of good X in the same factory costs the firm $50,000. In contrast, producing 200 units of good Y in one factory and 100 units of good X in another factory costs the firm $75,000. So, if the firm produces the two goods together, it achieves:

• A) quadratic returns to scale.
• B) diseconomies of scope.
• C) economies of scope.
• D) diseconomies of scale and diseconomies of scope.

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