Author Question: Which of the following is the best example of economies of scope? A) Coca-Cola expands its global ... (Read 86 times)

s.tung · **on:** Jul 1, 2018

Which of the following is the best example of economies of scope?

A) Coca-Cola expands its global operations to sub-Sahara Africa.
B) Alcohol for car fuel is produced from corn.
C) Amazon.com decides to rent out its Web site to independent e-commerce companies.
D) A company reduces its cost by getting bigger discounts for bulk purchases.

Question 2

Why can't all goods be inferior?

What will be an ideal response?

nmyers · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

C

Answer to Question 2

If all goods were inferior, an increase in income would lead to a decline in the quantity demanded for all goods. This, however, would leave the consumer below the budget line and therefore not achieving the highest utility possible.