Production costs and Revenue Flashcards
1
Q
2 advantages of specialisation
A
- EOS
- Higher output and quality
2
Q
2 disadvantages of specialization
A
- Structural unemployment
- outsourcing labour
3
Q
how can the law of diminsishing returns be combatted
A
- Outsourcing
- Training
4
Q
Reasons why economies of scale occurs
A
Really Fun Mums Try Making Pies
- Risk bearing
- Financial
- Managerial
- Technical
- Marketing
- Purchasing
5
Q
Reasons for diseconmies of scale
A
3 C’s and an M
- Communication
- Coordination
- Control
- Motivation
6
Q
What is Normal profit
A
the minimum reward for entrepreneurs to keep supplying there good or service (it covers opportunity cost of producing somewhere else)
7
Q
What are 3 roles of profit in a market economy
A
- Profits are retained and invested
- Reward to entrepreneurship
- Profits keep markets competitive and efficient
