A company makes camping equipment, which sells mainly in summer. It begins making ski and snowboard equipment, which sells mainly in winter, and starts supplying retailers in several countries.
Which effect of this change is most likely to reduce the amount of cash the company needs to keep in reserve?
Weak sales of one product or in one country may be offset by stronger sales elsewhere.
Fixed costs may be divided by product range rather than by units of output.
Making a wider product range may increase the output produced by each worker.
Entering additional markets may increase the company's share of its existing markets.
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.