Which of the Following Is the Most Likely Result When

question 143

Multiple Choice

Which of the following is the most likely result when there are economies of scope?

• A)outsourcing
• B)vertical integration
• C)natural monopoly
• D)multi-product firms
• E)adverse selection

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Definitions:

Average Fixed Costs

Costs that do not vary with the level of output and are averaged over the total number of units produced.

Marginal Costs

The expense associated with manufacturing an extra unit of a product or service.

TVC

The total expenses a firm incurs that increase or decrease with the level of output, essentially another term for total variable costs with a rephrased definition.

AVC

Average Variable Cost, which is the total variable costs divided by the quantity of output produced, reflecting the variable cost per unit.