GPN 71 Economies of Scale

What do economies of scale refer to?

• Increased competition among small producers

• Lower costs per unit for larger quantities

• Higher prices for goods in the market

• Higher costs for smaller producers

Why do larger producers tend to do better in the market?

• They have more employees

• They can sell goods at a higher price

• They can manufacture goods at a lower cost per unit

• They have better marketing strategies

What is one reason small producers might struggle against larger companies?

• They cannot compete on price

• They can produce goods faster

• They have better technology

• They have more resources

What example is used to illustrate economies of scale in the text?

• Manufacturing of cars

• Growing vegetables

• Making pancakes

• Production of bread

What happens to the villages that cannot compete with Café Fairprice?

• They sell their cows and chickens

• They start making different products

• They thrive and expand

• They form a trade bloc

What is a potential negative effect of high-investment technological production methods?

• Increased job opportunities

• Higher production costs

• Fewer jobs available

• Lower quality products

What does the text suggest about specialization?

• It increases competition

• It can make goods cheaper for consumers

• It leads to job losses

• It is only beneficial for large companies

What is the role of trade blocs as explained in the text?

• To reduce the cost of living

• To allow villages to specialize in different goods

• To increase competition among producers

• To promote individual farming

What is one benefit of having high-tech industries and universities in the same location?

• More land for farming

• Higher prices for goods

• Minimized transport costs

• Increased competition for jobs

What does the text imply about the relationship between small producers and larger companies?

• They always work together

• Small producers can benefit from larger companies

• Larger companies can drive small producers out of business

• Small producers have more advantages