Tyson Chicken produces both thighs and wings. When it produces 150 thighs and no wings, its total

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Tyson Chicken produces both thighs and wings. When it produces 150 thighs and no wings, its total cost is $600. When Tyson produces 150 wings and no thighs, its total cost is $400. And when Tyson produces both 150 thighs and 150 wings jointly, its total costs are $900. 

a. Show that, for an output level of 150 thighs and 150 wings, Tyson experiences economies of scope.

b. What is the likely source of Tyson’s economies of scope?

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Microeconomics

ISBN: 9781319105563

3rd Edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

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