Question: A multiproduct firm's cost function was recently estimated as: C ( Q 1 , Q 2 ) = 9 0 - 0 . 5 Q
A multiproduct firm's cost function was recently estimated as:
a Are there economies of scope in producing units of product and units of product
No there are no economies of scope.
You cannot determine if there are economies of scope.
Yes there are economies of scope.
b Are there cost complementarities in producing products and
No there are no cost complementarities.
You cannot determine if there are cost complementarities.
Yes there are cost complementarities.
c Suppose the division selling product is floundering and another company has made an offer to buy the exclusive rights to produ product How would the sale of the rights to produce product change the firm's marginal cost of producing product
Marginal cost would not change.
Marginal cost would increase.
Marginal cost would decrease.
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