Managerial Economics – ECP 3703
Eastern Florida State College – Palm Bay
Individual Problems Answer Key
7-1 Scale and Scope
What is the difference between economies of scale and economies of scope?
7-2 Brand Extensions
s managers were considering expanding into producing sports beverages.
Why might the company decide to do this under the Nike brand name?
7-3 Rangers’ T-Shirts
The variety of Riverside Ranger logo T-shirts includes 12 different designs. Setup between designs takes
one hour (and $18,000), and, after setting up, you can produce 1,000 units of a particular design per hour
(at a cost of $8,000). Does this production exhibit scale economies or scope economies?