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Context The focus of this discussion is on understanding the differences between economies of scale and economies of scope

Economics

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Context

The focus of this discussion is on understanding the differences between economies of scale and economies of scope. What are the key differences? Use these concepts to determine whether gains from economies of scale or gains from economies of scope were the principal reason behind a merger or acquisition.

Also see the help provided in the discussion preparation.

Instructions

Select one of the mergers and acquisitions below. Consider whether the merger/acquisition was about scope or scale economies.

• Sirius XM acquired Pandora.
• The acquisition of Credit Karma by Intuit.
• The merger of Strayer University and Capella University to form SEI.

For your chosen case, address the following in your discussion post:

• Explain how economies of scale and scope differ.
• Describe how growth in the case you selected is created from either an economy of scope or scale.