Question

The variety of Riverside Ranger logo T-shirts includes 12 different designs. Setup between designs takes one hour (and $24,000), and, after setting up, you can produce 1,000 units of a particular design per hour (at a cost of $12,000).Does this production exhibit scale economies or scope economies?

Answer 1

Answer: Yes,the production exhibit the scale of Economies scale.

Explanation: VC/Q=12000/1000=$12

Answer: AC=$24,000/Q+$12