Question detail

PixelPrint serves repeat customers while raising prices; the case evidence includes unit contribution of ?4,327, sales of 227 units, and a 14% change in costs or demand. Which option best applies Explain purchasing economies and technical economies of scale?

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At a glance

MCQ

Type

practice

Style

Topic

Expanding a business

Question

A. Use technical economies, purchasing economies, economies of scale to judge customer retention, shareholders 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 internal and external finance as identical and ignore the effect on shareholders.
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 customer retention, shareholders impact, and the business objective in Economies and diseconomies of scale.

Explanation

The answer is commercially strongest because Use technical economies, purchasing economies, economies of scale to judge customer retention, shareholders impact, and the business objective in Economies and diseconomies of scale. The case evidence gives ?5,827, 227 units, and 14%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse internal and external finance, miss the shareholders, 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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SwiftServe serves commuters while opening a second outlet; the case evidence includes net profit margin of ?10,123, sales of 848 units, and a 28% change in costs or demand. Which option best applies Explain purchasing economies and technical economies of scale?