Economies of Scope

question 22

Multiple Choice

Economies of scope

• A)are cost reductions that flow from operating in multiple related businesses.
• B)arise only from strategic fit relationships in the production portions of the value chains of sister businesses.
• C)are more associated with unrelated diversification than related diversification.
• D)are present whenever diversification satisfies the attractiveness test and the cost of entry test.
• E)arise mainly from strategic fit relationships in the distribution portions of the value chains of unrelated businesses.

---

Definitions:

Catch-Up Effect

The property whereby countries that start off poor tend to grow more rapidly than countries that start off rich

Economic Growth Rates

The percentage increase in the market value of the goods and services produced by an economy over time, typically measured on an annual basis.

Saving Rate

The proportion of disposable income that is saved rather than spent on consumption of goods and services.

Growth Rate

The growth rate measures the rate of increase in the size or value of something over a specific period, often used in the context of economic growth.