Question detail

SwiftServe serves premium buyers while launching a product; the case evidence includes labour productivity of ?10,182, sales of 722 units, and a 43% change in costs or demand. Which option best applies Explain how growth can create diseconomies of scale through communication problems, coordination issues and reduced staff motivation?

Try the question, check the answer, then read the explanation to understand the curriculum point.

At a glance

MCQ

Type

practice

Style

Topic

Expanding a business

Question

  1. A. Use economies of scale, diseconomies of scale to judge supplier lead time, lenders impact, and the business objective in Economies and diseconomies of scale.
  2. B. Give only a definition of Expanding a business without using the case evidence.
  3. C. Treat gross and net profit as identical and ignore the effect on lenders.
  4. D. Choose the largest sales figure without checking costs, finance, or context.

Answer

The correct option is: Use economies of scale, diseconomies of scale to judge supplier lead time, lenders impact, and the business objective in Economies and diseconomies of scale.

Explanation

This option works because Use economies of scale, diseconomies of scale to judge supplier lead time, lenders impact, and the business objective in Economies and diseconomies of scale. The case evidence gives ?11,682, 722 units, and 43%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse gross and net profit, miss the lenders, or ignore the business objective.

Common mistake

Economies and diseconomies of scale common mistake 1

Giving a vague answer instead of directly addressing: Explain how growth can create diseconomies of scale through communication problems, coordination issues and reduced staff motivation..

Answer by clearly explaining how to explain how growth can create diseconomies of scale through communication problems, coordination issues and reduced staff motivation..

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