Scale Of Production

Question 1

What is a plant or factory?

Answer 1

A factory is the actual establishment where production is organized or carried out

Question 2

What is a Firm?

Answer 2

A firm is an independently administered business unit carrying out production,construction or distribution activities

Question 3

What is an industry?

Answer 3

An industry consists of a group of firms producing similar commodities or offering similar services

Question 4

What is internal economies of scale

Answer 4

They are cost-saving advantages a large firm can achieve directly as a result of producing in large scale

Question 5

Meaning of internal diseconomies of scale?

Answer 5

These are those disadvantages which arise when a firm produces in large scale

Question 6

Internal diseconomies of scale

Answer 6

There is slow response to changes
Motivation may be lacking
There is impersonal relationship between the management and employees
It can lead to overproduction and a waste of resources
There is increased risks