Business expansion has potential benefits and drawbacks. Some owners are reluctant to take the risk of growing the business and opt to stay small.
What is a monopoly?
A government body
Two businesses joining together
When one retailer dominates a market
Why does a business benefit from growth?
It will have more competition
It will have more market power
It will have more overheads
What do economies of scale result in?
Lower unit costs
Unchanged unit costs
Higher unit costs
What is hiring more staff an example of?
What is spreading overheads over a large level of output an example of?
Economies of scale
Diseconomies of scale
How can small firms best compete against large rivals?
By cutting prices
By offering better customer service
By using advertising
How can a business grow in size?
Giving staff bonuses
When does organic growth occur?
When a company hires more staff
When a company merges with a rival
When a company takes over a rival
How often will a growing business make a profit?
It will always make more profit
It will sometimes make more profit
It will never make more profit
Which of the following is not guaranteed with business expansion?
Risk free profit