Question

Conner runs a rafting company on a local river. He runs two kinds of tripslong dash a wild whitewater experience and a more mellow wildlife tour. If he spends the day only doing whitewater​ trips, he can do 2 trips per​ day; if he spends the day only doing wildlife​ trips, he can do 6 trips. If he does some of​ each, however, he can do more total​ trips: 1 whitewater trips and 5 wildlife trips. Suppose that​ Conner's time is valued at ​$15 an hour. What can you say about his economies of​ scope? That​ is, what is the sign of his measure of economies of​ scope, SC?

Answer 1

The economies of scope will be "0.6". The further explanation is given below.

Step-by-step explanation:

Conner's estimated time seems to be $17 an hour.

And a full day's worth becomes

⇒ $17 × 24 = $408

The estimated value of every other white-water journey,

=
`(408)/(2)`

= $
`204`, perhaps if two white-water trips could be made per day.

The net value or amount of each wildlife tour

=
`(408)/(4)`

= $
`102`, because if four wildlife visits could be made through one day.

Presently, when he does several of them, he could do more visits, that would be to say, one white-water trip as well as three wildlife.

Therefore the total value of one trip in white-water as well as three trips in wildlife will be:

=
`204* 1 + 102* 3`

=
`204+306`

= $
`510`

Now,

The economies of scope,

=
`((408+408-510))/(510)`

=
`(306)/(510)`

=
`0.6`

The price of just doing individuals around each other is therefore,

=
`(0.6* 100)`

= 60% lower than that of the expense of doing all the multiple trips.