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Edexcel IGCSE Business Studies 5.1 Economies and Diseconomies of Scale Questions

Practise defining scale effects and explaining how business growth can lower or raise average costs as operations expand.

Syllabus
First assessment 2019
Course
Business Studies 4BS1

Exam points

  • define economies or diseconomies of scale using average cost and output changes
  • explain why business growth may raise average costs through size-related problems

Covered syllabus points

5.1.1 Economies of scale5.1.2 Diseconomies of scale

Question 1

[Maximum number: 1]

Define the term economies of scale.

Question 2

[Maximum number: 1]

The Better Toy Store (TBTS) is a children's toy shop. TBTS has three shops in Singapore. Two of the shops are located in busy shopping malls and the third is located at the Jewel Changi Airport. TBTS has a website for customers looking to buy toys online.

TBTS selects toys to sell that are excellent for play, value, design and quality. All TBTS toys are environmentally friendly.

Define the term diseconomies of scale.

Question 3

[Maximum number: 1]

NEXT works hard to remain competitive with other retailers of similar products.

Define the term economies of scale.

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