Question
The MomoGoose food truck produces pho and crispy rolls in quantities ofq1andq2respectively. For the cost functions below, indicate whether there are economies of scope, diseconomies
The MomoGoose food truck produces pho and crispy rolls in quantities ofq1andq2respectively. For the cost functions below, indicate whether there are economies of scope, diseconomies of scope, or neither. (Assume positive levels of production for both pho and crispy rolls.)
C(q1,q2)=q21+q22q1q2
There are economies of scope
There are diseconomies of scope
Neither of the above
C(q1,q2)=q1q2+q1+q2
There are economies of scope
There are diseconomies of scope
Neither of the above
C(q1,q2)=q1+6q2+46I(q1>0)+46I(q2>0). (I()is the indicator function.I(x)=1if conditionxis true, and0otherwise. For example,I(x+5>0)=1ifx+5>0and0otherwise.)
There are economies of scope
There are diseconomies of scope
Neither of the above
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