Advantages And Disadvantages of Scale of Production - SS1 Economics Past Questions and Answers - page 1
What is an advantage of a larger scale of production?
Higher flexibility
Lower cost per unit of production
Less market power
Less access to finance
What is a disadvantage of a larger scale of production?
High fixed costs
Easy adaptability to changes in the market
Fewer communication problems
Quick decision-making
What do economies of scale mean?
The cost per unit of production decreases as production volume increases
The cost per unit of production increases as production volume increases
The cost per unit of production stays the same regardless of production volume
None of the above
What is the disadvantage of diseconomies of scale?
The cost per unit of production decreases
The cost per unit of production increases
The cost per unit of production stays the same
None of the above
What is an advantage of a larger business's access to finance?
More difficulty in securing financing
Easier access to financing
The same level of access to financing as smaller businesses
None of the above
What is an example of a disadvantage of a larger scale of production?
Lack of flexibility - As businesses grow, they become less flexible and may struggle to adapt to changes in the market or to customer needs.
What is an example of an advantage of a larger business's access to finance?
Innovation and technological advancement - Large businesses can invest more in research and development, innovation, and technology, allowing them to stay ahead of the competition.