Homework
Context:
Firms seek growth. 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 of acquisition. Economists know these "synergies" as economies of scale and economies of scope. There is almost always in a merger or acquisition one of these forces which is the predominate force.
The focus of this homework will be on understanding the difference 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 the gains from economies of scope was the principle reason behind the merger or acquisition.
Task:
Select one of the mergers or acquisitions below:
o Sirius XM acquired Pandora, was this about scope or scale economies?
o The merger of Sprint, T-Mobile and Metro PCS, was this about scope or scale economies?
o The merger of Strayer University and Capella University to form SEI, was this about scope or scale economies?
Make sure you explain how economies of scale and scope differ. Describe how growth in the case you select is created from either an economy of scope or scale.
Format your homework according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.