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A company can produce two products disjointly or jointly. If the company produces the products disjointly, the cost function for the first product is C1(Q1)
A company can produce two products disjointly or jointly. If the company produces the products disjointly, the cost function for the first product is C1(Q1) = Q12. The cost function for the second product produced disjointly is C2(Q2) = Q22. If the company produces the two products jointly, the cost function is C(Q1,Q2) = Q12 + Q22 0.01Q1Q2. Which of these statements is TRUE? Economies of scope exist for the company. The company can produce more cheaply by producing the products jointly rather than disjointly. Economies of scope always exist for companies. This is why bigger companies are always more profitable. Economies of scope do not exist for the company. The company cannot produce more cheaply by producing the products jointly rather than disjointly. We cannot say if economies of scope exist for the company unless we know how much output of each product the company is producing
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