Suppose a firm has the production technology shown below for Goods 1 and 2 and respond to the following with rationale.
a. Does Good 1 indicate economies of scale?
b. Does Good 2 indicate economies of scale?
c. Do the two goods indicate economies of scope?
Good 1 Good 2 Both
Q1 Cost Q1 Cost Q1 Q2 Cost
10 50 10 60 10 10 100
20 100 20 100 20 20 180
30 150 30 130 30 30 250