By Which Formula Can the Concept of Economies of Scope

question 177

Multiple Choice

By which formula can the concept of economies of scope be represented?

• A) Average Costs (X,Y) < Average Costs (X) + Average Costs (Y)
• B) Total Revenues (X,Y) < Total Revenues (X) + Total Revenues (Y)
• C) Average Costs (X,Y) > Average Costs (X) + Average Costs (Y)
• D) Total Revenues (X,Y) > Total Revenues (X) + Total Revenues (Y)

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Definitions:

Capital Input

Capital input refers to the amount of physical assets used in the production process, including buildings, machinery, and equipment.

Production Process

The series of steps and operations involved in the creation of goods or services.

Inner Loop

In the context of the circular-flow diagram, it refers to the flow of goods and services from firms to households and the corresponding flow of money from households to firms.

Inputs And Outputs

The resources used in the production process (inputs) and the goods or services produced (outputs) in an economic system.