If a Firm Experiences Economies of Scope

question 13

Multiple Choice

If a firm experiences economies of scope,

• A)its average cost falls as it increases output
• B)its average cost rises as it increases output
• C)average production costs fall when it produces more than one kind of product
• D)it should integrate vertically
• E)average production costs rise as it produces more kinds of products

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Definitions:

Restraints of Trade

Legal or economic restrictions placed on the free exchange or movement of goods, services, or labor, often to maintain fair competition or prevent monopolistic practices.

Sherman Antitrust Act

A landmark federal statute in the U.S. passed in 1890 that prohibits monopolistic business practices and promotes competition in the marketplace.

Sherman Antitrust Act

A landmark U.S. law enacted in 1890 to counteract or reduce monopolies and maintain competition among businesses.

Interstate Commerce Commission

A regulatory agency in the United States established to oversee railroad rates and later expanded to other modes of transportation, until its operations were phased out in the late 20th century.