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1.4 Production, costs, revenue and profit

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Question 15

A firm grows and obtains cheaper finance, but decision-making becomes slower and administrative costs rise. Which conclusion is most accurate?

[1]
A

Average cost must fall because the interest rate is lower

B

Average cost must rise because decisions are slower

C

Overall average cost is unchanged because the effects cancel exactly

D

The overall change in average cost depends on the size of each effect

Markscheme

1.4 Production, costs, revenue and profit Questions

  1. GCSE
  2. /Economics
  3. /1.4 Production, costs, revenue and profit

138 exam-style questions on AQA GCSE Economics 1.4 Production, costs, revenue and profit, covering 1.4.1a Business objectives, 1.4.1b Types of costs and revenue, 1.4.1c Calculating profit, 1.4.1d Profit as an incentive to produce, 1.4.1e Moral and ethical considerations, 1.4.2a Production versus productivity, 1.4.2b Factors and benefits of productivity, 1.4.3a Economies of scale and business behaviour, 1.4.3b Types of economy of scale, and 1.4.3c Diseconomies of scale. Each one has a worked solution and a mark scheme showing where the marks go.

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