Question

An example of economies of scope is: Group of answer choices Google utilizing its information processing capabilities to provide data analysis services to other firms. The 200,000 unit production threshold for GM to make a profit on a car model. Decreasing per unit costs given increased unit production. Increasing per unit costs given increased unit production. None of the available answers.

Answer 1

Answer:

Google utilizing its information processing capabilities to provide data analysis services to other firms.

Explanation:

Many people confuse economies of scope with economies of scale. Economies of scope result when producing 2 or more different goods or services together is cheaper than producing them separately. While economies of scale refers to decreasing unit costs as the total output increases.

In the example above, Google already processes information for itself, and it is using that information to sell services to other companies. By producing both services together, the production costs lower.