7.14 : 범위의 경제

Economies of scope describe the lower costs a firm achieves by producing multiple products.

Suppose Firm A produces 800 cars by spending a specific amount, and Firm B produces 1,300 motorcycles for some given amount.

Firm C produces both cars and motorcycles. If Firm C can make 800 cars and 1,300 motorcycles while spending a lesser amount than Firms A and B spent together, then economies of scope occur for Firm C.

It arises because of the sharing of common inputs.

In producing cars and motorcycles, Firm C uses common resources, including a management team and skilled designers.

A management team overseeing the production of both products could be more productive in scheduling production and implementing quality control measures compared to two separate teams.

Also, skilled designers can work on both car and motorcycle design teams, applying their knowledge to create visually appealing designs for both types of vehicles.

However, diseconomies of scope describe the higher costs a firm incurs by producing multiple products. It could produce at lower cost by having separate firms, each focusing on a single product.