Business Growth Quiz

What is the primary reason businesses seek to grow?

• To limit production

• To decrease market share

• To generate more profits

• To reduce employee count

What does economies of scale refer to?

• Decreased market power

• Higher prices for products

• Increased costs as production rises

• Reductions in average costs as output increases

Which of the following is an internal economy of scale?

• Market power over suppliers

• Market share increase

• Brand recognition

• Bulk-buying

What is a potential disadvantage of a merger?

• Diseconomies of scale

• Reduced competition

• Increased market share

• Lower unit costs

What is a takeover?

• When a company buys out a rival

• A joint venture between two firms

• A friendly agreement between two companies

• A merger of two equal companies

Which of the following is an example of vertical integration?

• Occurs when firms in different stages of production join together

• Occurs when firms are in the same stage of production

• When two firms are in exactly the same line of business and the same stage of production

• •  When businesses join together to form one.

What is one benefit of organic growth?

• Higher risk of failure

• Retains company culture

• Immediate market share increase

• Requires less planning

What does increased market power allow a business to do?

• Reduce production costs

• Decrease brand recognition

• Control prices and terms with suppliers

• Limit product offerings

Which of the following is NOT a benefit of horizontal integration

• Common knowledge of the markets in which they operate

• Less likelihood of failure than emerging two different areas

• Similar skills of employees

• Less market competition

What is the main goal of achieving economies of scale?

• To increase production costs

• To decrease market presence

• To reduce average costs per unit

• To limit product variety