Question

Which of the following is an example of economies of scope?

A) A mountain resort begins running chairlifts for mountain bikers and hikers during the summer. The resort was initially built for skiing during the winter months.

B) Some computer hardware manufacturers lower costs by outsourcing support services to call centers in India.

C) Securicorp can provide security services to all local households at a lower average cost than if two firms provided home security.

D) Walmart can transport goods and services at a lower cost than any of its retail competitors can.

Answer 1

Economies of scope is nothing but finding a new business opportunity which is linked to the primary business.

A) A mountain resort begins running chairlifts for mountain bikers and hikers during the summer. The resort was initially built for skiing during the winter months.

It has found another business opportunity in the existing one.