Unit 1 - Economies of scale

studied byStudied by 1 person
0.0(0)
Get a hint
Hint

What are the 3 things that business size can be measured in

1 / 7

8 Terms

1

What are the 3 things that business size can be measured in

Sales revenue, Capital employed, Size of output

New cards
2

Define economies of scale

The cost advantages that a business can achieve as it increases its production

New cards
3

Define diseconomies of scale

The cost disadvantages that a business may face as it grows too large

New cards
4

Two benefits of internal economies of scale

  1. Can spread costs over a large number of units, making each unit cheaper to produce

  2. Lower costs mean higher profits, allowing businesses to compete more effectively.

New cards
5

Two consequences of internal diseconomies of scale

  1. Larger businesses become harder to manage, less flexible and less productive

  2. It highlights the risk of excessive growth and the importance of maintaining efficiency

New cards
6

Two types of internal diseconomies of scale

Communication problems

Staff demotivation

New cards
7

3 types of external economies of scale

  1. Supplier efficiency increasing, leading to lower production costs

  2. Infrastructure investments from the government leading to lower transportation costs

  3. Location of a business that specialises in a specific industry, attracting specialist labour

New cards
8

2 types of external economies of scale

Supplier inefficiency increasing leading to higher production costs

Increasing costs affecting the whole industry

New cards

Explore top notes

note Note
studied byStudied by 29 people
... ago
5.0(1)
note Note
studied byStudied by 7 people
... ago
5.0(1)
note Note
studied byStudied by 233 people
... ago
4.9(8)
note Note
studied byStudied by 15 people
... ago
5.0(1)
note Note
studied byStudied by 7 people
... ago
5.0(1)
note Note
studied byStudied by 5 people
... ago
5.0(1)
note Note
studied byStudied by 64 people
... ago
5.0(1)
note Note
studied byStudied by 180 people
... ago
5.0(1)

Explore top flashcards

flashcards Flashcard (33)
studied byStudied by 15 people
... ago
5.0(1)
flashcards Flashcard (38)
studied byStudied by 18 people
... ago
5.0(1)
flashcards Flashcard (114)
studied byStudied by 25 people
... ago
4.0(1)
flashcards Flashcard (80)
studied byStudied by 18 people
... ago
5.0(1)
flashcards Flashcard (24)
studied byStudied by 13 people
... ago
5.0(1)
flashcards Flashcard (20)
studied byStudied by 2 people
... ago
5.0(1)
flashcards Flashcard (129)
studied byStudied by 16 people
... ago
5.0(1)
flashcards Flashcard (139)
studied byStudied by 1 person
... ago
5.0(1)
robot