Question

Cost savings that the firm accrues when it successfully shares some of its resources and activities or some of its core competencies between its businesses are called:________

a. core economies.
b. economies of scope.
c. economies of competence.
d. economies of scale.

Answer 1

Option B.

Economies of scope

Step-by-step explanation:

Economies of scope refer to the reduction in the average total cost of a company's production when there is an increasing variety of goods produced.

It refers costs savings that the firm obtains by producing a variety of goods, which is less than when the goods are produced separately. In this way, there is a maximization of the available resources such as labor, land, machinery and management, which leads to the reduction in the cost.

Answer 2

b. economies of scope.

Step-by-step explanation:

Based on the information being provided within the question it can be said that this type of situation is known as economies of scope. This is basically the savings that are gained by a company from producing two or more different goods using shared resources. Which would cost them a lot more if they were produced separately.