Problem: The multiproduct cost function C(Q1,Q2)=f+aQ1Q2+(Q1)2+(Q2) has the characteristic of exhibiting cost complementary whenever a>0 and economies of scope whenever f-aQ1Q2>0
Required:
Question 1: Are cost complementarities possible without economies of scope? Explain your answers and provides examples.
Question 2: Also, would there be economies of scope if we have cost complementarities?