Economics - 0455 CIE

Firms

Gbogbo ọrọ náà

Firms come in every shape and size, from a single hairdresser to a global giant like Toyota or Walmart. They are the engines that turn the factors of production into the goods and services we buy. Understanding how firms are classified, why some stay small while others grow huge, and what happens to their costs as they expand is central to microeconomics.

In this lesson you will classify firms by sector and by ownership, weigh up the strengths of small versus large firms, and learn the three types of merger. Then you will dig into economies and diseconomies of scale: why average costs fall as a firm grows, and why they eventually rise again. By the end you will be able to analyse a firm's size and growth like an examiner.

Ebumnobi

primary/secondary/tertiary sector firms
private sector/public sector firms
advantages and disadvantages of small and large firms
definitions, examples, advantages and disadvantages of different types of mergers: horizontal, vertical and conglomerate
how internal and external economies and diseconomies of scale can affect a firm/industry as the scale of production changes
drawing and interpretation of average total cost (ATC) diagrams to illustrate economies and diseconomies of scale

Akọmọ Ojú-ẹkọ

How firms are organised and how big they grow shapes prices, choice, competition and jobs across the whole economy. Economies of scale, in particular, explain why large firms can charge lower prices, and they reappear in market structures, monopoly and international trade.

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Ayẹwo Ẹkọ

Ekele diri gi maka imecha ihe karịrị na Firms. 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.

A firm that mines coal operates in which sector? A. primary B. secondary C. tertiary D. public Answer: A
Two soft-drinks manufacturers join together. This is an example of a: A. vertical merger B. horizontal merger C. conglomerate merger D. takeover by the government Answer: B
Which is an internal economy of scale? A. proximity to related firms B. a local pool of skilled labour C. bulk-buying of raw materials D. the reputation of the area Answer: C
Diseconomies of scale occur when: A. average costs fall as output rises B. average costs rise as the firm becomes too large C. a firm buys a supplier D. small firms merge Answer: B
The main aim of a public sector firm is usually to: A. maximise profit B. provide a service C. take over rivals D. export goods Answer: B