Question: [elated to Solved Problem 11.6 on page 415] At one point, Time Warner and the Walt Disney Company discussed merging their news operations. Time Warner

[elated to Solved Problem 11.6 on page 415] At one point, Time Warner and the Walt Disney Company discussed merging their news operations. Time Warner owns Cable News Network (CNN) and Disney owns ABC News.

After analyzing the situation, the companies decided that a combined news operation would have higher average costs than either CNN or ABC News had separately. Use a longrun average cost curve graph to illustrate why the companies did not merge their news operations.

Source: Martin Peers and Joe Flint, “AOL Calls Off CNN–ABC Deal, Seeing Operating Difficulties,” Wall Street Journal, February 14, 2003.

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