9.9 Suppose that a firm produces two different outputs, the quantities of which are represented by q1 and q2. In gen eral, the firm’s total costs can be represented by C(q1, q2).

This function exhibits economies of scope if C(q1, 0) +

C(0, q2) > C(q1, q2) for all output levels of either good.

a.

Explain in words why this mathematical formulation implies that costs will be lower in this multiproduct irm than in two single-product irms producing each good separately.

b.