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CAIE A-Level Economics A2 7.7.2 Internal Growth Questions

Practise distinguishing internal and external growth and explaining diversification and risk-spreading strategies in CAIE Economics A2 questions.

Syllabus
2026–2028
Course
Economics 9708
Level
A2

Exam points

  • Explain internal and external growth, diversification and the strategic reasons firms expand into new markets.

CAIE A-Level Economics A2 7.7.2 Internal Growth Questions question 1

[Maximum number: 1]

Why might a firm adopt a policy of diversification?

A

to achieve cost economies of scale

B

to agree common prices with rivals

C

to ensure greater ability to spread investment risks

D

to increase productivity of labour

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