A-level economics - need help evaluating a point!!!

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9109
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The question is about the extent to which economies of scale are beneficial. I've made a point about how economies of scale contribute to lowered average costs, increased returns to scale, raised profits etc.
I'm struggling to evaluate the extent to which these benefits would be seen though.

What factors would affect how the benefits could be weakened, for instance?

Cheers!
Last edited by 9109; 8 months ago
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syca
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You could bring up diseconomies of scale, when the business has grown too large to manage and experiences the complete opposite of what you’ve stated. There’s also the point of competition, where smaller businesses actually have an upper-hand compared to larger businesses who have economies of scale. This is the case for customer-oriented services that require a more personal approach as smaller firms have the time to directly build that customer loyalty and get hands-on consumer knowledge.

Hope this helped!
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9109
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(Original post by syca)
You could bring up diseconomies of scale, when the business has grown too large to manage and experiences the complete opposite of what you’ve stated. There’s also the point of competition, where smaller businesses actually have an upper-hand compared to larger businesses who have economies of scale. This is the case for customer-oriented services that require a more personal approach as smaller firms have the time to directly build that customer loyalty and get hands-on consumer knowledge.

Hope this helped!
thanks sm! you've really helped dig me out of a hole hehe!
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