Learning objective
Explain how growth can create diseconomies of scale through communication problems, coordination issues and reduced staff motivation.
Read the explanation, check the common trap, then practise with flashcards and questions.
At a glance
5
Flashcards
7
Questions
Topic
Expanding a business
Subtopic
Economies and diseconomies of scale
Study support
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Short explanation
For a case-study question, Explain how growth can create diseconomies of scale through communication problems, coordination issues and reduced staff motivation sits within Economies and diseconomies of scale and Expanding a business for AQA GCSE Business 8132. Use a business such as Northline Gym serves premium buyers while launching a product; the case evidence includes labour productivity of ?8,124, sales of 884 units, and a 19% change in costs or demand to keep the explanation applied. The important reasoning is to connect economies of scale, diseconomies of scale with the business objective, the financial implication, and the effect on owners. Avoid treating fixed and variable costs as the same thing. A high-quality answer should explain the commercial trade-off, use precise evidence, and finish with a judgement that depends on the context rather than a generic definition.
Key concepts
Why it matters
This objective helps connect Economies and diseconomies of scale to exam-style questions, flashcards, and revision notes for Expanding a business.
Common mistakes
1 linked- Economies and diseconomies of scale common mistake 1: Answer by clearly explaining how to explain how growth can create diseconomies of scale through communication problems, coordination issues and reduced staff motivation..
Revision tools
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Flashcards5 linked cards
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Practice Questions7 linked questions
Question 1 of 7
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Revision notestopic notes
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Open revision notesRelated learning objectives
- Discuss advantages and disadvantages of business growth methods.
Methods of expansion
- Explain organic growth through franchising, opening new stores and e-commerce expansion.
Methods of expansion
- Explain outsourcing and external growth through mergers and takeovers.
Methods of expansion
- Explain how growth can create unit cost advantages through economies of scale.
Economies and diseconomies of scale
- Explain purchasing economies and technical economies of scale.
Economies and diseconomies of scale
