When there are economies of scope between products, selling off an unprofitable subsidiary could lead to:
A. a major reduction in costs.
B. a major reduction in sales.
C. only a minor reduction in costs.
D. only a minor reduction in sales.
Answer: C
You might also like to view...
Under laissez faire, the allocation of resources among different products depends on
a. consumer preferences. b. production costs. c. Both a and b are correct. d. Neither a nor b is correct.
Figure 7-2
depicts a demand curve with a price elasticity that is
a.
perfectly elastic, implying that as much as can be supplied will be purchased at the market price.
b.
relatively inelastic, implying that a percent increase in price results in a smaller percent reduction in sales.
c.
unitary, implying that a percent change in price leads to an equal percent change in quantity demanded.
d.
perfectly inelastic, implying that the same amount will be purchased regardless of the price of the good.