What are diseconomies of scope? a. the cost of producing two ...

[arivle123]

What are diseconomies of scope?
 a. the cost of producing two products jointly by one firm is more than the cost of producing them separately
  b. the cost of producing two products jointly by one firm is lesser than the cost of producing them separately
  c. the cost of producing two products jointly by one firm is equal to the cost of producing them separately
  d. none of the above

Question 2

Restricted Formulary Hospitals are big purchasers of pharmaceutical products and have to stock many different chemical entities. However, they increasingly do not stock all. Instead, they restrict their formularies to many of the treatments in a therapeutic class but consciously exclude a few. How does this help them negotiate?

[ebe]

Answer to Question 1

a

Answer to Question 2

If they were to carry every drug in existence, every drug producer would know that their disagreement value was high. But because there is a chance that a specific drug will not be included in the formulary, every drug producer now faces a disagreement value of 0 . This improves the bargaining position of the hospital.

[arivle123]

Thank you

[ebe]

Happy to help you