<P> Economies of scope are "efficiencies formed by variety, not volume" (the latter concept is "economies of scale"). For example, many corporate diversification plans assume that economies of scope will be achieved . </P> <P> The term and the concept's development are attributed to economists John C. Panzar and Robert D. Willig (1977, 1981). </P> <P> Whereas economies of scale for a firm involve reductions in the average cost (cost per unit) arising from increasing the scale of production for a single product type, economies of scope involve lowering average cost by producing more types of products . </P>

Which of the following is not an example of an economy of scope from diversification