Expanding a business (AQA GCSE Business): Quizzes
📚Quizzes
Practise the questions
12 questions from this quiz
ShowHide
Practise the questions
12 questions from this quiz
What is meant by economies of scale?
What is meant by economies of scale?
Cost per unit falls as business grows
What happens to unit costs and total costs as a business expands?
What happens to unit costs and total costs as a business expands?
Unit costs fall, total costs may rise
What are the two most significant types of economies of scale?
What are the two most significant types of economies of scale?
Purchasing power & technical improvements
What advantage do larger companies gain with suppliers?
What advantage do larger companies gain with suppliers?
Bargaining power
What is buying materials in large quantities called?
What is buying materials in large quantities called?
Bulk purchasing
What can larger firms afford that smaller companies cannot?
What can larger firms afford that smaller companies cannot?
Expensive, high-tech equipment
In the furniture example, what was the labour cost reduction from using machinery?
In the furniture example, what was the labour cost reduction from using machinery?
90%
What are diseconomies of scale?
What are diseconomies of scale?
Cost per unit rises when firms get too big
What happens when a business grows beyond its optimal size?
What happens when a business grows beyond its optimal size?
Growth harms efficiency & increases costs
What slows down decision-making in large organisations?
What slows down decision-making in large organisations?
Longer chains of command
How does working in a very large firm affect employee motivation?
How does working in a very large firm affect employee motivation?
Staff feel disconnected & less motivated
Why do large businesses need additional managers?
Why do large businesses need additional managers?
To handle complexity, which raises costs