business growth Flashcards
1
Q
what is meant by economies of scale
A
is a reduction of firms cost as production increases
2
Q
what does economies of scale allow
A
if they keep prices as they are it allows them to increase profit
they can lower price to gain a competitive advantage
3
Q
what are the types of economies of scale `
A
technical marketing managerial purchasing financial
4
Q
what are the problems that arise from growth
A
communication issues
become less flexible
could result in dis economies of scale
5
Q
what are the reasons for merger or takeover
A
complementary strengths sharing overhead costs acquisition of assets breaking into new markets diversification defensive reasons synergy
6
Q
what is a merger
A
business combine in a mutual agreement
7
Q
what is a takeover
A
business buys more than 50% of the shares of another business
