Economies of Scale Flashcards
1
Q
Economies of scale
A
A fall in average costs as a firm gorws larger in size.
2
Q
Types of economies of scale
A
Purchasing
Technical
Managerial
Marketing
Financial
Risk bearing
3
Q
Purchasing
A
Lower costs of raw materials from bulk buying.
4
Q
Managerial
A
Lower average costs from employment of specialist managers.
5
Q
Diseconomies of scale
A
A rise in average costs as a firm grows larger in size.
6
Q
Types of diseconomies of scale
A
Lack of co-ordination
Lack of communication
Loss of control
7
Q
External economies of scale
A
A fall in average costs as the industry that the business operates in grows in size.
