Serious Tutors; discussion board provide references

Serious Tutors; discussion board provide references

Economies of Scope and Scale

What are they? What is the key difference between an economy of scale and an economy of scope? https://cdnapisec.kaltura.com/index.php/extwidget/preview/partner_id/956951/uiconf_id/38285871/entry_id/1_e6f88crm/embed/dynamic

One source of growth is external growth from a merger and/or acquisition. Often merger/acquisition are justified on the basis of the expected benefits from the merger/acquisition are ‘synergies’. Economists know these as economies of scale and economies of scope.

Identify a recent merger/acquisition and use it to and answer the question: was the merger/acquisition predominately about gaining economies of scale or economies scope?

PLEASE DO NOT RELY ON WIKIPEDIA, INVESTOPEDIA OR ANY OTHER PEDIA AS A REFERENCE AT ANYTIME IN THIS COURSE.

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Economies of Scale and Scope

One of the primary ways through which firms increase profitability is through reduction in cost of production. Economies of scale and scope play a critical role in helping the investors reduce the cost of production of unit products, in effect helping the firms increase the profit levels by maintaining the market price for a lower production cost (Browning, Chiappori, & Lewbel, 2013).

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