Practise explaining firm growth and survival through scale, internal expansion, mergers and integration while evaluating cartels, takeover outcomes and ownership-control problems.
What is likely to make it more difficult for a small firm to survive?
increased preference on the part of consumers for distinctive non-standardised products
reductions in the rate of interest charged by commercial banks
the absence of effective barriers to the entry of potential competitors
the existence of decreasing returns to scale
C
Why might a firm adopt a policy of diversification?
to achieve cost economies of scale
to agree common prices with rivals
to ensure greater ability to spread investment risks
to increase productivity of labour
C
A major UK chemical firm was bought by its rival, a Dutch chemical firm.
What definitely occurred when the Dutch firm bought the UK firm?
a partnership
economies of scale
horizontal integration
increased profits
C