1) One of the main .......... of expansion is the ......... of average cost that comes from ......... on a large scale.
advantages ... reduction ... producing
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2) There are ... main ........ economies of scale
six ... internal
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3) Purchasing Economies: when a ..... firm buys its supplies in .... and gets them cheaper
large ... bulk
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4) Marketing Economies: a larger firm will need to spend .... per .... advertising its products
less ... unit
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5) Managerial Economies: larger firms can ...... to employ .......... managers who have expert ......... (e.g. accountants and .......)
afford ... specialist ... knowledge ... lawyers
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6) Financial Economies: banks are prepared to .... more ..... to larger firmest at lower ....... .....
lend ... money ... interest rates
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7) Technical Economies: can afford to operate more ........ machinery
advanced
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8) Risk-Bearing Economies: when a firm can sell a ..... of products into many different ....... A decline in ..... of one product won't significantly .... the firms cash ....
range ... markets ... sales ... harm ... flow
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9) There are .... main ........ economies of scale
four ... external
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10) These happen when a number of ..... firms locate .... to each other
large ... near
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11) ONE- Suppliers will choose to locate .... to their customers. This reduces ........ times and ......... costs
near ... delivery ... transport
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12) TWO- There will be a local ......... who already have the ...... needed. This reduces ........ costs for the firm.
workforce ... skills ... training
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13) THREE- The area will build up a good ..........which will ....... firms in the area and ......... other firms to locate there.
reputation ... benefit ... encourage
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14) FOUR- ...... may be made available by the ..........
Grants ... Government
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15) There are also ............ of scale
diseconomies
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16) The bigger the firm the ...... it is to ...... it properly
hader ... manage
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17) ......... take time to reach the whole workforce and workers at the bottom of the ......... feel .............
Decisions ... hierarchy ... insignificant
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18) The .......... process may become more ....... and difficult to coordinate. This means different departments may be working on ....... projects ....... knowing.
production ... complex ... similar ... without
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19) Bigger firms can produce goods at a lower cost PER ....!!!
ITEM!!!
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Other cards in this set
Card 2
Front
2) There are ... main ........ economies of scale
Back
six ... internal
Card 3
Front
3) Purchasing Economies: when a ..... firm buys its supplies in .... and gets them cheaper
Back
Card 4
Front
4) Marketing Economies: a larger firm will need to spend .... per .... advertising its products
Back
Card 5
Front
5) Managerial Economies: larger firms can ...... to employ .......... managers who have expert ......... (e.g. accountants and .......)
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