Question: A multiproduct firm's cost function was recently estimated as: (101,02) = 90 0.50102 + 0.4012 + 0.3022 a. Are there economies of scope in producing

A multiproduct firm's cost function was recently estimated as: (101,02) = 90 0.50102 + 0.4012 + 0.3022 a. Are there economies of scope in producing 10 units of product 1 and 10 units of product 2? O No - there are no economies of scope. Q You cannot determine if there are economies of scope. 0 Yes there are economies of scope; b. Are there cost complementarities in producing products 1 and 2? Q You cannot determine if there are cost complementarities. O Yes there are cost complementarities. O No there are no cost complementarities. c. Suppose the division selling product 2 is floundering and another company has made an offer to buy the exclusive rights to produce product 2. How would the sale ofthe rights to produce product 2 change the firm's marginal cost of producing product 1? O Marginal cost would increase. 0 Marginal cost would decrease. O Marginal cost would not change

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