Business Growth and Failure Quiz

What is one reason business owners may want to expand their business?

• Higher average costs

• Less market share

• More status for owners and managers

• Lower profits

What does 'economies of scale' refer to?

• Decrease in market share

• Higher prices for consumers

• Reduction in average costs as a business grows

• Increase in average costs as a business grows

Which type of growth involves merging with another business in the same industry?

• Vertical Integration

• Conglomerate Merger

• Internal Growth

• Horizontal Integration

What is a potential problem linked to business growth?

• Diseconomies of scale

• Faster decision making

• High employee morale

• Increased communication

Why might some businesses remain small?

• Large industry size

• Abundant capital for expansion

• Owner's desire for control

• High market demand

What is a common cause of business failure?

• Effective management

• Poor money management

• Strong competition

• High customer satisfaction

Why are new businesses at a greater risk of failing?

• They have more resources

• They often lack sufficient market research

• They are usually well-funded

• They have established customer bases

What is one reason for poor management in businesses?

• Experienced managers

• Lack of experience

• Strong leadership

• Effective planning

What can help overcome poor communication in larger businesses?

• Limiting information sharing

• Reducing staff meetings

• Using technology like email

• Avoiding technology

What is a characteristic of a conglomerate merger?

• Merging with a competitor

• Merging with a firm in a different industry

• Merging with a supplier

• Merging with a firm at the same production stage