Economies of scope differ from economies of scale in that A. C) scope refers to the reach of defined savings within the value chain, while scale refers to the magnitude or size of the operation itself. B. B) scope refers to strategic fits to be gained outside the value chain, while scale refers to the impact of the value chain on operations. C. E) they mean the same thing and the only difference is the extent of cost savings accrued from unrelated businesses in each. D. A) scope stems directly from strategic fit along the value chains of related businesses, while scale refers to cost savings that accrue directly from larger-sized operations. E. D) scope refers to the possibilities of change, while scale refers to the extent and direction of change.

Question

Business

Denisse

9 February, 10:04

Economies of scope differ from economies of scale in that A. C) scope refers to the reach of defined savings within the value chain, while scale refers to the magnitude or size of the operation itself. B. B) scope refers to strategic fits to be gained outside the value chain, while scale refers to the impact of the value chain on operations. C. E) they mean the same thing and the only difference is the extent of cost savings accrued from unrelated businesses in each. D. A) scope stems directly from strategic fit along the value chains of related businesses, while scale refers to cost savings that accrue directly from larger-sized operations. E. D) scope refers to the possibilities of change, while scale refers to the extent and direction of change.

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Julie Adkins · Answer 1

Option A. Scale refers to cost savings that accrue directly from larger-sized operations, while scope stems directly from strategic fit along the value chains of related businesses.

Explanation:

The Economies of scope refers to the savings arising from the same operations and value chains usage by adding an product to the existing product portfolio to lower the average production cost due to increased total production. However the economies of scale says that the increase in production of a product bring efficiencies and as a result the average product cost falls.