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Economies of scale versus scope

Economies of scale versus scope: Managerial Economics
Economies of scale versus scope: Managerial Economics

Economies of scope is best stated as: The more vary your produce (“scope”), the lower the average cost per product. A good example is running hotel and a restaurant. Since many resources can be shared (staff, management, IT infrastructure, parking), the combined firm has a cost advantage over a hotel-only or restaurant-only enterprise.

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