Economies Of Scale Flashcards
1
Q
Managerial
A
Able to hire specialist managers to boost efficiency + save time for other managers
2
Q
Production/technological
A
Able to buy better machinery to improve productivity
3
Q
Risk bearing
A
Able to take more risks with new products / enter new markets
4
Q
Marketing
A
Advertising costs spread over more units
5
Q
Purchasing (EOS)
A
Buy in bulk and get low unit costs
6
Q
Financial
A
Borrow with a better rate of interest (banks trust larger businesses with their money)
7
Q
External EOS
A
Changes outside the firm that businesses benefit from eg better roads to improve travel/delivery times
8
Q
Diseconomies of scale
A
Average unit costs rise the larger the business
