Question

Economies of scope A. are cost reductions that flow from cost-saving strategic fits along the value chains of related businesses in the business lineup of a multibusiness corporation. B. arise only from strategic fit relationships in the production portions of the value chains of sister businesses. C. are more associated with unrelated diversification than related diversification. D. are present whenever diversification satisfies the attractiveness test and the cost-of-entry test. E. arise mainly from strategic fit relationships in the distribution portions of the value chains of unrelated businesses.

Answer 1

A. are cost reductions that flow from cost-saving strategic fits along the value chains of related businesses in the business lineup of a multibusiness corporation.

Step-by-step explanation:

Economies of scope occur when a good is manufactured, the cost of manufacturing a related goods is reduced. It means that there would be reduction in the cost of production of a goods as a result of increase in variety of goods. It is a situation whereby the cost of producing two products is less compare to when that product is produce separately.

It should be noted that economy of scope are cost reductions that flow from cost-saving strategic fits along the value chains of related businesses in the business lineup of a multibusiness corporation.