N2

Hormel produces both chicken products and turkey products. When it produces 200 chicken products and no turkey, its total cost is $500. When it produces 200 turkey products and no chicken, its total cost is $700. And when it produces both 200 chicken products and 200 turkey products jointly, its total costs are $1000. Show numerically that Hormel experiences economies of scope to produce 200 turkeys' and 200 chickens' and explain. What is the likely driving force of Hormel's economies of scope?