Moorfield has become a centre for precision-instrument production. As the combined volume of goods sent by producers in the area increases, a logistics operator introduces a shared nightly collection service.
Moorfield Instruments Ltd uses the service. It has made no changes to its own machinery or production methods.
| Measure | Before the shared service | After the shared service |
|---|---|---|
| Monthly output dispatched | 1,500 units | 1,500 units |
| Monthly dispatch cost | £18,000 | £13,500 |
All other costs per unit and the selling price are unchanged.
Using the information, explain how the shared collection service could create an external economy of scale for Moorfield Instruments Ltd and affect its profit per unit.
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.