Q. Suppose a firm has the production technology shown below for Goods 1 and 2.

(a) Does Good 1 indicate economies of scale? Why?

(b) Does Good 2 indicate economies of scale? Why?

(c) Do the two goods indicate economies of scope? Why?

Good 1

Good 2

Both

Q1

cost

Q 2

cost

Q 1

Q 2

cost

10

50

10

60

10

10

100

20

100

20

100

20

20

180

30

150

30

130

30

30

250