Question

The merger between two general merchandise stores Sears and K-Mart who each carried some specialty items will most likely produce:
A. neither economies of scope nor economies of scale.
B. both economies of scope and economies of scale.
C. economies of scope, but not economies of scale.
D. economies of scale, but not economies of scope.

Answer 1

Answer:

B. Both economies of scope and economies of scale.

Explanation:

In microeconomics, economies of scale are the cost favorable circumstances that undertakings acquire because of their scale of activity, with cost per unit of yield diminishing with expanding scale.  

Economies of scope are "efficiencies framed by assortment, not volume". In economics, "economies" is equivalent word to cost sparing and "scope" is synonymous with widening generation/benefits through differentiated items.