Question detail
QuickFix Repairs serves repeat customers while raising prices; the case evidence includes unit contribution of ?4,208, sales of 638 units, and a 39% change in costs or demand. Which option best applies Explain purchasing economies and technical economies of scale?
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
- A. Use technical economies, purchasing economies, economies of scale to judge labour productivity, managers impact, and the business objective in Economies and diseconomies of scale.
- B. Give only a definition of Expanding a business without using the case evidence.
- C. Treat gross and net profit as identical and ignore the effect on managers.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use technical economies, purchasing economies, economies of scale to judge labour productivity, managers impact, and the business objective in Economies and diseconomies of scale.
Explanation
This option works because Use technical economies, purchasing economies, economies of scale to judge labour productivity, managers impact, and the business objective in Economies and diseconomies of scale. The case evidence gives ?5,708, 638 units, and 39%, 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 managers, or ignore the business objective.
Common mistake
Economies and diseconomies of scale common mistake 1
Giving a vague answer instead of directly addressing: Explain purchasing economies and technical economies of scale..
Answer by clearly explaining how to explain purchasing economies and technical economies of scale..
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