If a Firm Experiences Economies of Scope,_____

question 49

Multiple Choice

If a firm experiences economies of scope,_____

• A)its average cost falls as output increases.
• B)its average cost rises as output increases.
• C)its average total cost falls when it produces more than one kind of product.
• D)it gains larger profits through vertical integration.
• E)its average total cost rises as it produces more than one kind of product.

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Definitions:

Non-working Spouse

A spouse who does not engage in regular paid employment outside the home.

Previously-taxed Dollars

Funds that have already been subject to taxation, not requiring further tax upon withdrawal or transfer.

Qualified Pension Plan

A retirement plan that meets the requirements of the Internal Revenue Code and ERISA, offering tax advantages to the employer and employee.

Nontaxable

refers to income or financial transactions that are not subject to tax by the government.