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Jemshah
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Asked: 2023-01-21T09:35:18+00:00 In:

Explain five benefits that may accrue to a firm from operating in large scale. (10 marks)November 2022

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Explain five benefits that may accrue to a firm from operating in large scale.
(10 marks)November 2022

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    Enlightened
    1. Economies of scale: As a firm increases its production, it can benefit from economies of scale, which refer to the cost advantages that a firm can achieve by producing goods or services in large quantities. These can include lower costs for raw materials, labor, and capital.
    2. Increased market power: A firm operating in large scale may have increased market power, which means it has more control over the prices it can charge for its goods or services. This can help the firm to increase its profits.
    3. Improved efficiency: A firm operating in large scale may be able to improve its efficiency by specializing in a particular product or service, which can lead to lower costs and higher productivity.
    4. Enhanced ability to invest in new technologies: A firm operating in large scale may be able to invest more in new technologies, which can help it to improve its production processes and create new products.
    5. Better bargaining power: A firm operating in large scale may be able to negotiate better deals with suppliers and customers, due to its larger volume of transactions.
    6. Greater access to capital: A firm operating in large scale may have more access to capital, which can help it to expand its operations and invest in new projects.
    7. Diversification: A firm operating in large scale can diversify its product lines, services or markets, which can help it to spread risks and increase its chances of survival in case of market fluctuations
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