12 Questions
What is the term for the financial advantages of producing something in very large quantities?
Economies of scale
What can discourage businesses from growing too big due to rising average costs?
Diseconomies of scale
In what manner does a firm grow when it merges with another?
Take over
What is the term for the rising average costs when a firm becomes too large?
Diseconomies of scale
Which factor would not typically limit a business from growing in size?
Internal economies of scale
What type of services are connected with but less important than the main part of something?
Ancillary services
What is the main benefit of economies of scale for a firm?
Decreased average costs as output increases
Which of the following is an example of an internal economy of scale?
Purchasing in bulk to reduce costs
What can lead to diseconomies of scale for expanding firms?
Miscommunication arising from a complex hierarchy
Which factor can contribute to reducing unit costs in economies of scale?
Using previously purchased ingredients efficiently
What is the difference between internal and external economies of scale?
Internal EOS arise from business growth, while external EOS occur within an industry
How can large organizations overcome the challenge of ineffective communication in relation to economies of scale?
Implement strategies to enhance communication efficiency
Learn about Economies of scale, which occur when the average costs of running a business decrease as the firm increases its output and size. Internal and external economies of scale are also explained with examples.
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