ECONOMIC OF SCOPE

ECONOMIC OF SCOPE

      Economic scope is said when products share common inputs and diversification leads to cost saving.

EXAMPLE

WE can take an example of newspaper TIMES OF INDIA

Times of India produce daily newspaper the printing works of newspaper are done in night so the editorial team are free in morning and they collect report in day time and they start producing the weekly MAGAZIN TIMES OF INDIA is release... here we can see the same editorial team same printing machine producing the multiple goods earning extra margins from by printing weekly magazine i.e they are producing MULTIPLE OUTPUTS, and they are able to do so because their MC is close to zero or virtually equal to zero.