Business 0450 · IGCSE · Costs, scale of production and break-even analysis

Costs, scale of production and break-even analysis — practice question

(a)[8]

Identify and explain four economies of scale that DH may gain when it acquires a competitor. Economy of scale 1: Explanation: Economy of scale 2: Explanation: Economy of scale 3: Explanation: Economy of scale 4: Explanation:

(b)[12]

Look at the advantages and disadvantages of the two businesses Hilda could buy. Advise which business Hilda should take over, and support your choice. ABC Hotel: XYZ Hotel: Recommendation:

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Purchasing economies - buying in bulk lowers average costs” …

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