Different types of economies of scale (growth)

Question 1

Financial economies of scale

Answer 1

larger companies can benefit from better interest deals on loans and wider sources of cheap finance

Question 2

Marketing economies of scale

Answer 2

Large companies can attract specialist buyers who don’t waste money buying stock that will not sell. They also have specialised marketing staff

Question 3

Technical EOS

Answer 3

There are the advantages that large firms have when it comes to the production process

Question 4

Managerial EOS

Answer 4

Large companies have the money to attract specialist and experienced managers who make best decisions

Question 5

Risk bearing EOS

Answer 5

Large companies benefit from wider more diversified product range. This means they are better able to withstand the risk of a fall in demand for one good/service