Day: June 23, 2025

Big Staffie plc has recently been able to achieve significant external economies of scale.

This indicates that the market for the company’s only product has been?

Select ONE answer:

1. Static, so forcing the company to achieve economies of scale in production
2. Growing, so enabling the economies of scale to be achieved
3. Contracting, so enabling the company to cut costs in distribution
4. Volatile, meaning that internal economies of scale were unattainable

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > External economies of scale arise by virtue of the market for the product growing, enabling greater levels of business across which to spread the company’s costs.
3. Not correct
4. Not correct

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