A producer turns waste glass into recycled aggregate. Its annual output and total cost before and after an expansion are shown in the table.
| Scale of production | Annual output | Annual total cost |
|---|---|---|
| Before expansion | 2,400 tonnes | £312,000 |
| After expansion | 6,000 tonnes | £660,000 |
Calculate how much lower the producer's annual total cost is at its expanded output than it would have been if its cost per tonne had remained at the pre-expansion level.
Explain what the data suggest about whether the producer has benefited from economies of scale and how this may affect its ability to compete on price.
83 exam-style questions on OCR GCSE Economics 2.6 Production, covering 2.6.1 Role of producers, 2.6.2 Importance of production and productivity, 2.6.3 Calculate cost, revenue, profit and loss, 2.6.4 Explain cost, revenue, profit and loss, 2.6.5 Cost, revenue and profit for producers, and 2.6.6 Economies of scale. Each one has a worked solution and a mark scheme showing where the marks go.