ECO 550 Week 2

ECO 550 Week 2

Context

One source of growth is external growth from a merger or acquisition. Often mergers or acquisitions are justified on the basis of the expected benefits from "synergies" created by the merger or acquisition. Economists know these as economies of scale and economies of scope.

The focus of this discussion will be on defining economies of scale and economies of scope, as well as the key differences between the two within the context of a hypothetical scenario of your choice.

Instructions

Select one of the mergers and acquisitions below:

• Sirius XM acquires Pandora.
• The merger of Sprint, T-Mobile and Metro PCS.
• The merger of Strayer University and Capella University.
• The Renault–Nissan–Mitsubishi Alliance.

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

https://hwacer.com/Tutorial/eco-550-week-2/

• What are the synergies that come from the economies of scope?
• What are the synergies that come from the economies of scale?
• How do economies of scope and economies of scale differ within the context of your chosen scenario?
  • How are these two concepts different in general?

Note: In your discussion posts for this course, do not rely on Wikipedia, Investopedia, or any similar website as a reference or supporting source.

To earn full credit for your discussion, you must complete one post and one follow-up or reply to a classmate. Make sure both the post and the reply focus on the questions asked.

Clarification on policy on references.  In general you will not actually need a reference to reply to a discussion.  These are problem solving exercise. You are creating a solution, but you may chose to use a reference.  If you do use a reference, it must be an academically credible reference.  Remember that the reference you select is part of your credibility.  Never use investopedia, wikipedia, or any other predia.  These are not acceptable.  Use of one of these will mean zero credit on the exercise.

Second, the discussions are a learning activity.  We will assess your progress on the topic, but that is not a grade.  If you have not mastered all the insights, you will find feedback to help you improve your understanding.  Use that to do additional post to improve and we will re-assess our evaluation.