Question

How do economies of scale affect small businesses?

Answer 1

Benefits in the form of cost reduction and increased productivity available to a business unit as it expands its size is called economies of scale.

Explanation:

1 . It can for for Division of Labour
2. It can employ specialised person to manage business and skilled workers.
3. It can bargain with suppliers of raw materials.
4. It can adopt diversification of products.
5. It can raise finance with the banking system with ease.
6. By taking care of welfare of its workers, it can increase their productivity.