Which of the Following Cost Functions Exhibits Economies of Scope

question 31

Multiple Choice

Which of the following cost functions exhibits economies of scope over the specified output range?

• A) C(Q₁,Q₂) = 2 − 0.5Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ > 0 and Q₂ > 0
• B) C(Q₁,Q₂) = 2 − 3Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ > 0 and Q₂ > 0
• C) C(Q₁,Q₂) = 2 − 0.5Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ < 2 and Q₂ < 2
• D) C(Q₁,Q₂) = 2 − 3Q₁Q₂ − (Q₁)² + (Q2)², for all Q₁ > 4 and Q₂ > 4

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Definitions:

Expected Strike

A labor action anticipated by both employers and employees, typically following unsuccessful negotiations or escalating labor disputes.

Permanent Strike Replacements

Workers hired to take the positions of striking workers on a permanent basis, often used by employers as a strategy to weaken a strike and put pressure on striking employees.

Mediator

A neutral third party who facilitates negotiation and attempts to help disputing parties reach a mutually acceptable agreement, without having the power to impose a solution.

Corporate Campaigns

Strategies used by labor unions or activist groups to pressure a company into changing its practices, often involving public relations efforts.