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Which of the Following Cost Functions Exhibits Economies of Scope

Question 124

Multiple Choice

Which of the following cost functions exhibits economies of scope when three (3) units of good one and two (2) units of good two are produced?

A) C = 50 − 5Q₁Q₂ + 0.5Q₁² + Q₂².
B) C = 10 + 4Q₁Q₂ + Q₁² + Q₂².
C) C = 15 + 5Q₁Q₂ + 2Q₁ + 4Q₂.
D) C = 5 + Q₁Q₂ + Q₁²Q₂².

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