Economic Of Scale

Question 1

What is Economic of Scale?

Answer 1

Is cost advantage that a business can exploit by expanding their scale of production

Question 2

Types of Economic of Scale

Answer 2

Internal economic of scale and external economic of scale

Question 3

What is Internal economic of scale

Answer 3

Is when a company cuts cost using its own internal resources

Question 4

What is External economic of scale?

Answer 4

Is external factors that affect an entire industry

Question 5

Types of Internal economic of scale

Answer 5

~Technical economic of scale
~Organizational/Managerial economic of scale
~Commercial/Marketing economic of scale
~Fianancial economic of scale

Question 6

What are technical economic of scale?

Answer 6

use of technology to boost efficiency

Question 7

What is Organizational/Marketing economic of scale?

Answer 7

Is when division of labour production process is split into separate task

Question 8

What is Commercial/Marketing economic of scale?

Answer 8

Is when a business benefit from bulk discount

Question 9

What is Financial economic of scale?

Answer 9

Is when a good credit rating allows a business to benefit from getting loans quite easily at Lower rates