Economies of Scale

Economies of scale are gained when a business...

• decreases it's production and causes an increase in average production costs

• increases it's production and causes a decrease in average production costs

• maintains production levels and causes an increase in average production costs

• increases it's production and causes an increase in average production costs

Which of the following EOS refers to improving the production process?

• Financial

• Managerial

• Technical

• Purchasing

Diseconomies of scale occurs when a business...

• grows larger and manages their operations effectively.

• becomes too large to run effectively and efficiently.

• grows slowly and maintains growth.

• becomes very large but still manages to run effectively.

'Bulk buying' refers to which EOS?

• Financial

• Technical

• Purchasing

• Managerial

Which of the following is an advantage of financial EOS?

• Paying suppliers higher prices

• Lower interest rates for loans

• Paying dividends to shareholders

• Repeat purchases from loyal customers

Write a definition for one of the types of EOS:

1. Technical

2. Managerial

3. Purchasing

4. Financial

5. Marketing