Economies of Scope

Economies of Scope are often obtained by producing small batches of many items, because they frequently involve marketing and distribution efficiencies, economies of scope are more dependent upon demand than economies of scale. This is important for any large business, and a firm can go about achieving such scope in a variety of ways. It make product diversification efficient if they are based on the common and recurrent use of proprietary know-how or on an indivisible physical asset. Economies of scope, factors that make it cheaper to produce a range of products together than to produce each one of them on its own.