What is the main difference between Economies of Scope and economies of scale?
Here’s what they mean in microeconomics. Economies of scale deals with how much output changes according to cost of production. Economies of scope deals with how much output changes according to how many firms are producing a product. “Economies of scale: output can be doubled for less than a doubling of cost. Similarly, diseconomies of scale: a doubling of output requires more than a doubling of cost.” “Economies of scope: joint output of a single firm is greater than output that could be achieved by two different firms when each produces a single product.” This might arise if the production of some product requires only a few laborers, and having more laborers only lets them interfere with each other’s work.
