Question
If Economies of Scale exist when average costs fall as output increases. So it is important knowing whether your long-run costs exhibit constant, decreasing, or
If Economies of Scale exist when average costs fall as output increases.
So it is important knowing whether your long-run costs exhibit constant, decreasing, or increasing returns to scale which can help you make better long-run decisions.
Economics of Scope exist when the cost of producing two products jointly is less than the cost of producing those two products separately.
Cost (Q1, Q2) < Cost (Q1) + Cost (Q2)
And if you want to exploit economies of scope by producing both Q1 and Q2. This is a major cause of mergers.
So would it be correct in an example below to assume Amazon is experiencing Economies of Scope ?
Question:
So if recently Amazon bought Whole Foods Market.
Due to this potential purchase which Economic Concept is Amazon experiencing "Economies of Scale" or "Economies of Scope" ???
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