The correct answer is: B. Economies of scale and economies of scope are the same
Economies of scale are the cost advantages that a company obtains due to expansion. As the scale of production increases, the average cost per unit decreases. This is because the company can spread the fixed costs over a larger number of units, and it can also take advantage of economies of specialization.
Economies of scope are the cost advantages that a company obtains when it produces multiple products. As the number of products produced increases, the average cost per unit decreases. This is because the company can share resources and expertise across the different products.
Economies of scale and economies of scope are not the same. Economies of scale are related to the size of the company, while economies of scope are related to the number of products produced.
A. Normally, a price demand curve slopes downward from left to right. This is because consumers are generally willing to pay less for a good or service as the quantity available increases.
C. For optimisation, equality between marginal cost and marginal revenue is a necessary condition but it is not a sufficient one. This means that if marginal cost is equal to marginal revenue, then the company is producing the optimal level of output. However, there may be other factors that need to be considered, such as the company’s objectives.
D. Law of variable proportions denotes input-output relationship during short run. This means that in the short run, a company can only change the amount of variable inputs, such as labor and materials. The amount of fixed inputs, such as capital, cannot be changed.