A commercial laundry expands its operations. It replaces several small machines with a high-capacity washing and drying line and processes linen in longer production runs.
| Monthly output | Total cost |
|---|---|
| 60,000 items of linen | £42,000 |
| 150,000 items of linen | £82,500 |
Using the information, explain how one economy of scale may improve the laundry’s 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.