Diseconomies of Scope Occur When

question 45

Multiple Choice

Diseconomies of scope occur when:

• A) a firm's input prices rise as it increases output.
• B) a firm's average cost of production rises as it increases production.
• C) producing two products in a single firm is more expensive than producing them in separate firms.
• D) a firm's average cost of production falls as it increases production.

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Definitions:

Binding

A legal or contractual agreement that is enforceable in a court of law.

Lapsed

Refers to a policy or agreement that becomes invalid because it was not renewed or maintained as required.

Verbal Offer

A proposal made orally to enter into a contract or agreement, which can be legally binding if it meets certain criteria.

Invitation to Do Business

An expression of interest or a solicitation that is not legally binding, essentially a preparatory step to entering negotiations.