Question
Q. Suppose a firm has the production technology shown below for Goods 1 and 2. ( a) Does Good 1 indicate economies of scale ?
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
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Principles of Auditing An Introduction to International Standards on Auditing
Authors: Rick Hayes, Philip Wallage, Hans Gortemaker
3rd edition
273768174, 978-0273768173
