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Cambridge IGCSE Business Studies practice

Paper 1 structured question: Costs, scale of production and break-even analysis

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Costs, scale of production and break-even analysis

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Paper 1Short Answer and Data Response2 marks

A company has been expanding rapidly and is facing challenges in communication and employee motivation.

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Company Expansion Challenges

The company has increased its workforce significantly but has noticed a decline in productivity and employee satisfaction.

  1. a

    Explain two potential diseconomies of scale that the company might be experiencing.

    Aim for approximately 2 distinct marking points.

    [2]

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Paper 1 structured question: Costs, scale of production and break-even analysis

Paper 1Short Answer and Data Response1 marks

Description

Considerations for Expansion

The business currently operates at a small scale and is evaluating the benefits of increasing production.

  1. a

    Identify one type of economy of scale that the business could benefit from by expanding production.

    Aim for approximately 1 distinct marking point.

    [1]