Discussion week 2

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Week 2 Discussion

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Economies of Scope and Scale

What are they? What is the key difference between an economy of scale and an economy of scope?

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One source of growth is external growth from a merger and/or acquisition. Often merger/acquisition are justified on the basis of the expected benefits from the merger/acquisition are ‘synergies’. Economists know these as economies of scale and economies of scope.

Identify a recent merger/acquisition and use it to and answer the question: was the merger/acquisition predominately about gaining economies of scale or economies scope?

PLEASE DO NOT RELY ON WIKIPEDIA, INVESTOPEDIA OR ANY OTHER PEDIA AS A REFERENCE AT ANYTIME IN THIS COURSE.

FOR THE MAXIMUM POSSIBLE CREDIT OF 20 POINTS, YOU MUST COMPLETE ONE POST AND ONE FOLLOW-UP/REPLY. MAKE SURE BOTH THE POST AND REPLY FOCUS ON THE QUESTIONS ASKED.

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