week 2 discussion ECO

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 discussion 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.

The Assignment:

Select one of the mergers or acquisitions below:

• Sirius XM acquired Pandora, was this about scope or scale economies? 
• The merger of Sprint, T-Mobile and Metro PCS, was this about scope or scale economies? 
• 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.

Note:  In your discussion posts for this course, do not use Wikipedia,  Investopedia or any similar websites as reference supporting your  conclusions.  Use of these in any form or to any extent taints all  content.  They should never be used in any professional writing.