BP not only drills for oil but also refines it. In doing so, BP produces automobile gasoline and trucking/rail diesel fuel in nearly fixed proportions at three of their refineries in Louisiana.

1. What then can you say about the economies of scope in this case?

2. In terms of the sign of the scope, is it positive, negative, or neither? Also, what can be said about the economies of scale as it relates to the sign of the scope?

Answer rating: 100% (QA)

1 We can say BP reaps economies of scope in this case by producing all products 2 it is ... View the full answer