[Step-by-Step] Cost function of a multi-product operation. C(Q_1,Q_2)=75-0.25Q_1Q_2+0.1Q_1^2+0.2Q_2^2 are there economies of scope in producing 10 units
Question: Cost function of a multi-product operation. \(C\left( {{Q}_{1}},{{Q}_{2}} \right)=75-0.25{{Q}_{1}}{{Q}_{2}}+0.1Q_{1}^{2}+0.2Q_{2}^{2}\)
- are there economies of scope in producing 10 units of product 1 and 10 units of product 2.
- Are there cost complementarities in producing products 1 and 2?
- Suppose the division selling product 2 is floundering and another company has made an offer the buy the rights to produce product 2. How would the sale of the rights to produce product 2 change the firms marginal cost of producing product ?
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