Business Studies - 0450 CIE

Economies And Diseconomies Of Scale:

Gbogbo ọrọ náà

Why can a giant supermarket sell a tin of beans for less than a corner shop pays for it? The answer is economies of scale: as a business grows bigger, the cost of making each unit can fall, handing large firms a powerful advantage. But grow too big and the opposite can happen, and costs creep back up.

In this lesson you will learn the five economies of scale that lower a big firm's average costs, and the diseconomies of scale that can raise them again. You will be able to calculate average cost, explain why size cuts both ways, and judge how large a business should aim to be.

Ebumnobi

  1. The concept of economies of scale with examples, e.g. purchasing, marketing, financial, managerial, technical
  2. The concept of diseconomies of scale with examples, e.g. poor communication, lack of commitment from employees, weak coordination

Nkuzi Olu

Gee ntị na nkuzi a na ngwa

Maapụ uche

E seela isiokwu a ka ị hụ otu echiche si ejikọta.

Mepee maapụ uche na ngwa

Kaadị ncheta

Omume ncheta ngwa ngwa n'ihe a na-anwale n'isiokwu a.

Mee omume kaadị ndị a na ngwa

Akwụkwọ Ọmụmụ

Economies of scale explain why large firms dominate so many industries and why growth is such a common objective. The exam asks you to name and explain the economies, recognise diseconomies, and often to calculate average cost. Getting the key idea (average cost, not total cost) right is the difference between full marks and none.

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Nnyocha Ọmụmụ

Ekele diri gi maka imecha ihe karịrị na Economies And Diseconomies Of Scale:. Ugbu a na ị na-enyochakwa isi echiche na echiche ndị dị mkpa, ọ bụ oge iji nwalee ihe ị ma. Ngwa a na-enye ụdị ajụjụ ọmụmụ dị iche iche emebere iji kwado nghọta gị wee nyere gị aka ịmata otú ị ghọtara ihe ndị a kụziri.

Ị ga-ahụ ngwakọta nke ụdị ajụjụ dị iche iche, gụnyere ajụjụ chọrọ ịhọrọ otu n’ime ọtụtụ azịza, ajụjụ chọrọ mkpirisi azịza, na ajụjụ ede ede. A na-arụpụta ajụjụ ọ bụla nke ọma iji nwalee akụkụ dị iche iche nke ihe ọmụma gị na nkà nke ịtụgharị uche.

Jiri akụkụ a nke nyocha ka ohere iji kụziere ihe ị matara banyere isiokwu ahụ ma chọpụta ebe ọ bụla ị nwere ike ịchọ ọmụmụ ihe ọzọ. Ekwela ka nsogbu ọ bụla ị na-eche ihu mee ka ị daa mba; kama, lee ha anya dị ka ohere maka ịzụlite onwe gị na imeziwanye.

  1. Economies of scale lower a firm's: A. total cost B. average (unit) cost C. selling price only D. revenue Answer: B
  2. A firm has total costs of 800000 dollars and makes 40000 units. Its average cost is: A. 2 dollars B. 20 dollars C. 200 dollars D. 2000 dollars Answer: B
  3. Getting a discount for buying materials in bulk is a: A. financial economy B. purchasing economy C. technical economy D. managerial economy Answer: B
  4. Which is a diseconomy of scale? A. cheaper borrowing B. bulk-buying discounts C. poor communication in a very large firm D. specialist managers Answer: C
  5. A large firm can borrow money more cheaply than a small one. This is a: A. marketing economy B. financial economy C. technical economy D. purchasing economy Answer: B

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