QUESTION IMAGE
Question
if a firm is able to lower total costs by specializing in marketing and distribution while outsourcing production, it is taking advantage of. multiple choice less developed nations. economies of scope. economies of scale. technical efficiency.
Economies of scope occur when a firm can reduce total costs by producing multiple products or services in a combined manner. In this case, specializing in marketing and distribution (while outsourcing production) allows the firm to leverage shared resources and capabilities across these related activities, thus lowering costs. Technical efficiency is about producing a given output with minimal inputs (not relevant here). Economies of scale relate to cost - reduction from increasing the scale of a single product's production. "Less developed nations" is an unrelated geographical/development - stage factor.
Snap & solve any problem in the app
Get step-by-step solutions on Sovi AI
Photo-based solutions with guided steps
Explore more problems and detailed explanations
economies of scope.