A food truck operator originally produced hamburgers and hotdogs.To serve the tastes of their various customers,the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well.Since the new products were introduced,average costs rose dramatically.The vendor is experiencing

A) Economies of scale
B) Economies of scope
C) Diseconomies of scale
D) Diseconomies of scope

Question

​A food truck operator originally produced hamburgers and hotdogs.To serve the tastes of their various customers,the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well.Since the new products were introduced,average costs rose dramatically.The vendor is experiencingA) ​Economies of scaleB) Economies of scopeC) Diseconomies of scaleD) ​Diseconomies of scope

Zybrea Knight · Accepted Answer

Final Answer : D, Explanation :  Diseconomies of scope occur when producing additional types of products or services leads to an increase in the average cost of production. In this case, the introduction of turkey dogs and ham sandwiches resulted in a dramatic increase in average costs, indicating diseconomies of scope.

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