ECONOMICS OF SCOPES :
This is the Reduction in the long-run average and also reduction in the marginal costs due to complete use of facilities and then processed in producing a larger variety of goods or services.
or in another words we can say reduction in the long-run average and marginal costs, due to the production of similar or related goods or services .
example :--
1. let take the example of BURGERS KING there we got combo packs in which burger with cold drinks , fries all get in one so this makes not burger service but also cola drinks and fries .Instead of INCREASE IN QUANTITY OF BURGER THEY ARE INCREASING THE VARIETY OF ITEMS .so finally use is same with less budget or investment and this will increase their profit .
2. like same in brooms and vacuum combo business will give more profit as need and use is same so less budget and investment will give more revenue .
so this comes under economics of scope ...not increse in quantity but increse in the variety of goods and services .
This is the Reduction in the long-run average and also reduction in the marginal costs due to complete use of facilities and then processed in producing a larger variety of goods or services.
or in another words we can say reduction in the long-run average and marginal costs, due to the production of similar or related goods or services .
example :--
1. let take the example of BURGERS KING there we got combo packs in which burger with cold drinks , fries all get in one so this makes not burger service but also cola drinks and fries .Instead of INCREASE IN QUANTITY OF BURGER THEY ARE INCREASING THE VARIETY OF ITEMS .so finally use is same with less budget or investment and this will increase their profit .
2. like same in brooms and vacuum combo business will give more profit as need and use is same so less budget and investment will give more revenue .
so this comes under economics of scope ...not increse in quantity but increse in the variety of goods and services .
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