The Jolson Corporation produces 1,000 wood cabinets and 500 wood desks per year, the total cost being

Question:

The Jolson produces 1,000 wood cabinets and 500 wood desks per year, the total cost being $30,000. If the firm produced 1,000 wood cabinets only, the cost would be $23,000. If the firm produced 500 wood desks only, the cost would be $11,000.
a. Calculate the degree of economies of scope.
b. Why do economies of scope exist?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...