Economies of Scale 0.0 / 5 ? EconomicsEconomies of ScaleIGCSEEdexcel Created by: tsalomrobertsCreated on: 20-04-21 19:28 What are diseconomies of scale? Rising average costs as the firm become too big 1 of 19 What are economies of scale? Falling average costs due to the expansion of a firm 2 of 19 What are Internal EoS? These relate to the falling average costs of an individual firm 3 of 19 What are External EoS? These relate to the falling average costs in an industry. They benefit all firms in one industry 4 of 19 Name all of the Internal EoS Financial. Risk-bearing. Marketing. Managerial. Bulk-buying. Technical. 5 of 19 What are financial EoS Large firms can get access money more cheaply 6 of 19 What are Managerial Economies As firms expand, they can afford specialist managers 7 of 19 What are Risk-bearing Economies Larger firms are more likely to have wider product ranger and sell into a wider variety of markets. 8 of 19 What are Purchasing Economies Large firms that buys lots of resources get cheaper rates 9 of 19 What are Marketing Economies Some marketing costs can be spread over more units of output for a larger firm 10 of 19 What are Technical Economies Larger factories are often more efficient than smaller ones 11 of 19 What are External EoS Skilled Labour. Infrastructure. Access to Suppliers. Similar businesses in the Area 12 of 19 Explain Skilled Labour as a DEoS A build-up of labour with the skills and work experience required by that industry, so training costs will be lower 13 of 19 Explain Infrastructure as a DEoS If a particular industry dominates a region, the roads, railways etc will be shaped to suit that industry's needs 14 of 19 Explain Similar Businesses in the Area When firms are close, they are likely to cooperate with each other so that they can all gain 15 of 19 Name the Diseconomies of Scale Bureaucracy. Communication Problems. Lack of Control. Distance between senior staff and shop floor workers 16 of 19 Explain Bureaucracy as a DEoS Business uses too many resources in administration that causes slow decision making 17 of 19 Explain Communication Problem as a DEoS Different language and cultures make communication challenging 18 of 19 Explain Lack of Control as a DEoS Very large businesses are hard to control and coordinate and increases needs for more supervision and more layers of managment 19 of 19
Comments
No comments have yet been made