Answer the following:

a) Define the termseconomies of scaleandeconomies of scope, and discuss their significance with regards to efficiency as well as the number of firms in a market. (15 marks)

b) Determine whether the production technology of a firm whose cost function is (1,2)=(1+2)4C(q1,q2)=(q1+q2)4 exhibits economies of scale and/or economies of scope, assuming 1q1 and 2q2 are the quantities of two distinct goods produced by the firm. (10 marks)