Question

One source of growth is external growth from a merger and/or acquisition. Often merger/acquisition are justified on the basis of the expected benefits from 'synergies' created by the merger/acquisition. Economists know these as economies of scale and economies of scope. The merger with the yet to be concluded merger of Sprint, T-Mobile and Metro PCS, mergers and acquisitions and determine if the synergies come from economies of scope or economies of scale. Make sure you provide a clear explanation of the difference between economies of scope and economies of scale for the merger that is yet to be concluded for the merger of Sprint, T-Mobile and Metro PCS.

Answer 1

basis for comparison	economic of scale	economic of scope
meaning	It refers to saving in the cost due to increase in output produced.	It refers to saving in the cost due to production of two or more products , using same operations.
reduction in	the average cost of producing one product.	the average cost of producing multiple products.
cost advantage	due to volume	due to variety
strategy	old	relatively new
use of	large amount of resources	common resources

under the deal, Sprint would be absorbed into T- Mobile, which the companies say will net $43 billion in cost synergies through economies of scale. It point to MetroPCS, which has three times as many employees now as it did when T-Mobile acquired it in 2013.

Both Sprint and T-Mobile got where they are in the wireless market by selling to customers on the bottom of the income scale.Between them, T-Mobile(38 percent) and Sprint(16 percent) will control more than half the pre-paid market.

this merger spread colors in rest of the country in U.S.