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In the Text,we Showed That the Multiproduct Cost Function C(Q1,Q2)=f+aQ1Q2+(Q1)2+(Q2)2C \left( Q _ { 1 } , Q _ { 2 } \right) = f + a Q _ { 1 } Q _ { 2 } + \left( Q _ { 1 } \right) ^ { 2 } + \left( Q _ { 2 } \right) ^ { 2 }

question 133

Essay

In the text,we showed that the multiproduct cost function C(Q1,Q2)=f+aQ1Q2+(Q1)2+(Q2)2C \left( Q _ { 1 } , Q _ { 2 } \right) = f + a Q _ { 1 } Q _ { 2 } + \left( Q _ { 1 } \right) ^ { 2 } + \left( Q _ { 2 } \right) ^ { 2 } exhibits cost complementarity whenever a<0a < 0 and economies of scope whenever faQ1Q2>0f - a Q _ { 1 } Q _ { 2 } > 0 .
a.Can cost complementarity exist without economies of scope?
b.Can there be economies of scope when cost complementarities exist?

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Definitions:

Retained Earnings

The portion of a company’s net profits which is kept within the company instead of being paid out to the shareholders as dividends.

Dividend Reinvestment Plans

Programs that allow investors to automatically reinvest their cash dividends into additional shares or fractional shares of the underlying stock.

Open Market

A freely competitive market where buyers and sellers can engage in transactions with minimal government intervention.

Debt Ratio

A financial ratio that measures the extent of a company's or individual's leverage in relation to the assets they own.

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