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Economies of scale: ways in which long run increases in output and capacity can reduce costs per unit of output and increase efficiency.
These can be either INTERNAL or EXTERNAL.

Internal economies: are long run reductions in costs per unit resulting from expansion of a single business.
Technical economies: when…

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Organic growth: expansion of a single business by extending its own operations rather than be merger or takeover activity. Slower but
more secure. E.g. Sainsbury's & Coca-Cola

Inorganic growth: refers to expansion by merger or takeover, bringing sudden increases in business size. E.g. bank of Scotland took over





A straight forward 2 page document on the economies of scale. Students should adapt them for their own purposes eg create a mind map.

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