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SingaporeBusiness StudiesQuick questions

Operations Management

Quick questions on Costs of production and economies of scale explained: O-Level Business Studies

6short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.

What is types of cost?
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$Total cost=Fixed costs+(Variable cost per unit×Output)\text{Total cost} = \text{Fixed costs} + (\text{Variable cost per unit} \times \text{Output})$
What is average (unit) cost?
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The average cost, or cost per unit, is:
What is economies of scale?
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Economies of scale are the fall in average cost as a business grows and produces more. The main internal types are:
What is q1?
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Define the term fixed costs. [2 marks]
What is q2?
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A firm has fixed costs of 3,000andvariablecostsof3,000 and variable costs of 4 per unit. Calculate its total cost at 1,000 units. [2 marks]
What is q3?
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Explain one economy of scale a large firm may gain as it grows. [4 marks]

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