Business Studies- Break-even Analysis and Economies and diseconomies of scale Flashcards
1
Q
Break- even is..
A
where the total costs are equal to to the total revenue. At this point the business makes neither a profit nor a loss.
2
Q
Output is measure on the horizontal axis and revenue, costs and profit are measure on the …
A
vertical axis.
3
Q
Graph shows:
A
Profit, loss, margin of safety, total revenue, total cost and break-even point
4
Q
Diseconomies of scale:
A
rising average costs when a firm becomes too big
5
Q
Economies of scale:
A
falling average costs due to increase in size and fall in average costs
6
Q
External economies of scale:
A
the cost benefits that all firms in the industry can enjoy when the industry expands.
7
Q
Internal economies of scale:
A
the cost benefits that an individual firm can enjoy when it expands
8
Q
Scale:
A
the size of a business
