Economies And Diseconomies Of Scope

Often, costs can be lowered by producing a complementary good or service to the goods and services already produced. In this paper, you will explore the concepts of Economies and Diseconomies of Scope.

Activity Instructions

Choose a company that produces several products (goods and/or services). For the company you have selected, discuss the combinations of goods and services it produces.

Some questions you may consider in the paper:

 Which goods and services enjoy economies of scope?

 Why do those economies of scope arise? (Consider inputs, production, distribution and/or output markets, etc.)

 Are there goods and services the company produces that could have diseconomies of scope?

 Why do those diseconomies of scope arise?

 If there are, what effect does that have on the company’s strategy (Consider costs, production, etc.)

 What goods or services might you suggest the company consider producing?

 Why would it be a good idea for the company to produce those suggested goods or services?

Writing and Submission Requirements

 2.5-3 pages, not including title and reference pages

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