Economies of Scale

What type of economies of scale results from a firm's ability to spread the costs of advertising over a larger output?

• Technical economies.

• Workforce specialisation economies.

• Financial economies.

• Marketing economies.

Answer explanation

Marketing economies result from a firm's ability to spread the costs of advertising over a larger output, leading to cost savings and efficiency in marketing activities.

Which type of economies of scale is associated with employees becoming experts in their tasks?

• Technical economies.

• Workforce specialisation economies.

• Purchasing economies.

• Financial economies.

Answer explanation

Workforce specialisation economies refer to the type of economies of scale associated with employees becoming experts in their tasks.

What is a benefit of purchasing economies of scale?

• Higher interest rates for loans.

• Increased marginal costs.

• Attracting better discounts due to bulk purchases.

• Needing multiple marketing campaigns for different regions.

Answer explanation

Purchasing economies of scale attract better discounts due to bulk purchases, leading to cost savings.

Economies of scale can only be achieved in....

• Long Run

• Short run

Technological economies of scale can only be feasible for a business if

• Banks lend money for the purchase of highly expensive technology

• Capital equipment is capable of producing mass units of a product in a short time
  

• There is an economic boom

• There is sufficient market demand for the product

What is an example of economies of scale

• Realising

• Evaluating

• Purchasing

Employing specialist cost accountant in a growing business is an example of which type of internal economies of scale?

• technical economies of scale

• risk bearing economies of scale

• Managerial economies of scale

• marketing economies of scale

Which type of economies of scale is achieved when a company reduces its per-unit cost by increasing production levels?

• A) Technical economies

• B) Managerial economies

• C) Financial economies

• D) Production economies

What is a characteristic of financial economies of scale?

• A) Lower interest rates on loans due to larger borrowing

• B) Increased advertising costs

• C) Higher production costs

• D) Decreased employee specialization

How do technical economies of scale benefit a manufacturing firm?

• A) By reducing the cost of raw materials

• B) By increasing the efficiency of production processes

• C) By lowering marketing expenses

• D) By enhancing employee training programs