Economies of Scale GCSE Business

Economies of scale are those that

• Result from changes in production techniques

• Increase due to the growth of the industry as a whole

• Generate lower per unit production costs

• Reduce production costs in the short run

External economies of scale can arise from

• Bulk purchases of raw materials, parts and components at favorable prices by a particular business/firm

• Purchase and use of physical/human capital by a particular business/firm

• Greater availability of skilled laborers for a particular industry in a particular area

• A business/firm being able to obtain lower interest rates on loans

External economies of scale are cost savings available to the whole ________ as a result of its __________.

• Industry, Location
• Business, Location
  
• Industry, Size
• Business, Size

Machinery is likely to be efficient. what economies it indicate?

• Financial Economies
• Buying Economies
• Technical Economies
• Managerial Economies

---------- resulting from a firm growing too large.

• External Diseconomies
• Internal Diseconomies
• Internal Economies
• External Economies

Where a firm benefits from being able to hire highly skilled staff due to it being a large company.

• Purchasing

• Managerial

• Technical

• Financial

Where a business is able to buy new technology and machinery due to it being large

• Technical

• Managerial

• Purchasing

• Marketing

Bulk buying for discount is which type of economy of scale?

• Managerial

• Purchasing

• Technical

• Financial

Large business are usually able to negotiate lower repayments on loans. What economy of scale is this?

• Financial

• Marketing

• Managerial

• Purchasing

This economy of scale is where advertising budgets can be spread across multiple products for lower average costs.

• Managerial

• Marketing

• Financial

• Purchasing