What does business expansion mean?
When a owner sells a share in their business
When a business moves to a different supplier
When a business increases the size and scale of their operations
Which method of growth will allow a business to keep its own values?
Internal (organic)
Merger
Takeover
What is the name for the individual who purchases the right to use a well known brand?
Investor
Franchisee
Franchisor
What does 'economies of scale' mean?
When average unit cost of a product falls
When average unit cost of a product increases
When average unit cost of a product stays the same
Which is a method of internal (organic) growth?
Franchising
Which method of internal (organic) growth involves getting another business to manufacture products for you?
E-commerce
Outsourcing
What is a drawback of business expansion?
Potential for higher profit
Slower decision making
More power in the market
Which are the two main types of economies of scale?
Purchasing and technical
Political and technological
Social and ethical
What is the formula for average unit costs?
Fixed costs
Total costs ÷ output
Total revenue - total costs
If a business grows too big and becomes hard to control, which of the following may occur?
Economies of scale
Diseconomies of scale
Opportunity costs