Problem: Laura's Raw Yarn (LRY) Company sells undyed wool yarn through the mail, promoting it through craft magazines. All of the raw wool is supplied by Stephen Rich Lamb Farms which raises lambs to be sold to local butchers and sells its wool only to LRY, which then spins the wool into high quality yarn. The yarn is bought by individuals and independent crafts people who use it for knitting, crocheting and weaving products that are highly prized. What types of economies does Laura's Raw Yarn exploit? What types of economies does Stephen Rich Farms exploit? Are there further possibilities for obtaining cost advantages that either of these companies might exploit? What actions would be necessary to achieve those economies?