ZuoTi.Pro
Question

The cost to produce shirts is $3 per unit. The cost to produce pants is $12...

The cost to produce shirts is $3 per unit.

The cost to produce pants is $12 per unit.

The cost to produce shirts and pants is $14 per outfit.

Does this firm have economies of scope?

Group of answer choices

No

Yes

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

The firm experiences economies of scope when it produces two distinct goods together at a lower price that the firm could have incurred if it decided to produce that two goods separately.

It is given that the cost incurred to produce a shirt is $3 per unit and the cost incurred to produce a pant is $12 per unit. However, it costs only $14 to produce shirt and pant both. If the firm decides to produce shirt and pant separately then it will cost $3 + $12 = $15 but it cost only $14 per outfit when produced together. Therefore, this firm experiences economies of scope.

0 0
Add a comment
Know the answer?
Add Answer to:
The cost to produce shirts is $3 per unit. The cost to produce pants is $12...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • The cost to produce shirts is $3 per unit. The cost to produce pants is $12...

    The cost to produce shirts is $3 per unit. The cost to produce pants is $12 per unit. The cost to produce shirts and pants is $14 per outfit. Does this firm have economies of scope? Ο Νο Yes What is this firm's profit if price, p = $64? Profit = pq - 2q2-36 476 468 28 O

  • A factory makes 500,000 shirts and 1,000,000 pants. Direct materials are $3,500,000 and $2,000,000 for pants...

    A factory makes 500,000 shirts and 1,000,000 pants. Direct materials are $3,500,000 and $2,000,000 for pants and shirts, respectively. Direct Labor is $1,300,000 and $500,000 for pants and shirts, respectively. Factory overhead is $4,200,000. The firm pays $20 per hour. The allocation base is direct labor hours. Required: derive the unit costs for a pair of pants and a shirt. OH Cost OH Rate Total Allocation Base Allocation | Allocated Base Used | OH Object By Object II | Allocation...

  • A manufacturer of clothing makes pants, shirts, and jackets. The profit on a pair of pants is $12...

    A manufacturer of clothing makes pants, shirts, and jackets. The profit on a pair of pants is $12.00, on a shirt is $8.00, and on a jacket is $18.00. Both pants, shirts and jackets require the work of sewing operators and cutters. There are 60 hours of sewing operator time and 48 hours of cutter time available. It takes 10 minutes to sew one pair of pants, 6 minutes to sew a shirt, and 14 minutes to sew one jacket....

  • 1. Suppose country A can produce 30 units of Corn per time period (if it specializes...

    1. Suppose country A can produce 30 units of Corn per time period (if it specializes in Corn). Country A can produce 4 outfits per time period (if it specializes in outfits). If country B specializes in Corn, it can produce 40 units per time period. If country B specialized in Outfits, it can produce 3 outfits per time period. A has a comparative advantage in Corn. B has a comparative advantage in Outfits. neither country has a comparative advantage....

  • With current technology, suppose a firm is producing 500 shirts daily. Also assume that the least-cost...

    With current technology, suppose a firm is producing 500 shirts daily. Also assume that the least-cost combination of resources in producing those shirts is 10 units of labor, 8 units of land, 3 units of capital, and 4 units of entrepreneurial ability, selling at prices of $50, $40, $60, and $30, respectively. If the firm can sell these 500 shirts at $2 per unit, what is its total revenue? Its total cost? Its profit or loss? Will it continue to...

  • Exhibit 8-17 Marginal revenue and cost per unit curves As shown in Exhibit 8-17, the firm...

    Exhibit 8-17 Marginal revenue and cost per unit curves As shown in Exhibit 8-17, the firm will produce in the short run if the price is: Group of answer choices A. more than $10 per unit. B. more than $15 per unit. C. more than $20 per unit. D. more than $30 per unit. E. more than $40 per unit. ATC 1 AVC Price and costs per unit (dollars) 0 20 100 40 60 80 Quantity of output (units per...

  • Consider a perfectly competitive market for shirts. The following graph shows the dally cost curves of a firm oper...

    Consider a perfectly competitive market for shirts. The following graph shows the dally cost curves of a firm operating in this market. PRICE, COST (Dollars per shirt 20 Profit or Loss MC 16 ATC 12 AVC 6 12 18 24 30 36 QUANTITY OF OUTPUTIThousands of shirts per dayl Help Clear AIL In the short run, at a market price of $18 per shirt, this firm will choose to produce 27.00 shirts per day On the previous graph, use the...

  • 1. Marginal cost pricing means that a firm charges Group of answer choices A price that...

    1. Marginal cost pricing means that a firm charges Group of answer choices A price that is marginally lower than the average total cost of production. Any price as long as average total cost is greater than marginal cost. A price that is marginally higher than the average total cost of production A price that is equal to the marginal cost of production. 2. If the government wants a natural monopolist to achieve allocative efficiency, the government should Group of...

  • On October 1, BSS placed an order for 160 golf shirts at a unit cost of...

    On October 1, BSS placed an order for 160 golf shirts at a unit cost of $18, under terms 2/10, n/30. Record the place of the order for golf shirts. 2. The order placed on October 1 was received by BSS on October 10, but 30 golf shirts had been damaged in shipment. Record the inventory purchased on account. 3. On October 11, the 30 damaged golf shirts were returned. Record the return of the damaged inventory. 4. On October...

  • if sales price is $12 per unit and variable cost is $3 per unit the contribution...

    if sales price is $12 per unit and variable cost is $3 per unit the contribution margin ratio is $9 75% 25% $15

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT