Can Economies of Scope Exist in a Very Small Business

question 25

Multiple Choice

Can economies of scope exist in a very small business?

• A)No. Only large businesses can be sufficiently large to accrue such benefits
• B)Yes. For example, a village shop which is also a post-office
• C)It is unlikely that the managers of such a small business would understand the theory enough to apply it
• D)Theoretically yes, but they are very rare

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Definitions:

Economic Reason

Refers to motivations or justifications based on economic factors, such as cost, efficiency, or profitability.

Bumping Rights

Preferential rights allowing more senior employees to displace less senior ones in certain job positions during layoffs or organizational restructuring.

Seniority Provision

A policy or clause giving priority or special rights to employees based on the length of service with an employer.

Greater Tenure

A status achieved by employees that denotes longer service or employment duration, often bringing certain benefits or protections such as job security.