Business Growth

The reduction in average costs of production as a business grows.

• Diseconomies of scale

• Economies of scale

• Minimum efficient scale

• Overtrading

Total costs divided by output

• Average costs

• Fixed costs

• Profit

• Variable costs

The ability of larger firms to negotiate discounts on orders

• Managerial economies

• Technical economies

• Purchasing economies

• Financial economies

• Risk bearing economies

Large firms are often able to borrow more money at lower rates as they have more collateral.

• purchasing economies

• managerial economies

• technical economies

• financial economies

External economies of scale arise as an industry grows. Which of the following is NOT an external economy of scale?

• Risk bearing

• Labour

• Ancillary services

• Disintegration

Market power arising from business growth means

• Businesses can force their suppliers to offer lower prices

• Businesses can offer their suppliers higher prices

Which model mentions power of suppliers?

• Ansoff's Matrix

• Boston Matrix

• Porter's five forces

• Porter's generic strategies

Increased market power may mean

• More innovation and increased choice for customers

• Less innovation and decreased choice for customers

Increased brand recognition allows a larger business to

• Charge higher prices

• Launch new products more easily

• Differentiate their products from rivals

• All of the above

The point at which long run average costs are minimised

• Break even point

• Profit

• Minimum efficient scale