Economies of Scope

Note: a description about Economies of scope is also available in the Competition Law Portal of the European Encyclopedia of Law.

Economies of scope in the European Antitrust Law

Meaning of Economies of scope provided by the “Glossary of terms used in EU competition policy” (European Commission. Directorate-General for Competition. Luxembourg: Office for Official Publications of the European Communities, cop. 2002): Economies of scope occur when firms achieve cost savings by increasing the variety of goods and services that they produce (joint production). Such effects arise when it is possible to share components and to use the same facilities and personnel to produce several products. For example, a bank may sell retail insurance products in its local branches in order to spread the fixed costs (like the office rent) over a larger number of products.