The Statement: "Economies of Scope in Shared Resources Do Not

Multiple Choice

The statement: "Economies of scope in shared resources do not provide a sufficient justification for diversification" is:

A) Correct: Cost savings form shared resources are of little value unless there are also organizational capabilities that can be transferred between the businesses
B) Correct: to justify diversification economies of scope need to be supported by transactions costs in the market for the particular resources
C) Incorrect: economies of scope are sufficient grounds for diversification on their own
D) Incorrect: the benefits from economies of scope need to exceed the administrative costs of the corporate HQ.