Economies of scope refers to the decrease in average total cost that can occur when a firm:

CA Foundation · Business Economics · MTP · January 2025
Economies of scope refers to the decrease in average total cost that can occur when a firm:
(A) A. produces more than one product.
(B) B. has monopoly power in world markets.
(C) C. controls the raw materials used as inputs.
(D) D. narrows the scope of its regional markets.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. produces more than one product.

Topics: Theory of Production and Cost

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