Emre Evals 3

• What are economies of scale?

  Cost reductions per unit as firms grow
• What happens when diseconomies of scale set in?

  Average costs begin to rise due to inefficiencies
• What is organic growth in business?

  Expansion at a manageable pace with control
• What are the challenges of inorganic growth?

  Integration challenges and cultural clashes
• What is the primary goal of businesses?

  Profit maximisation
• How do businesses balance profit maximisation with other goals?

  By considering stakeholder interests and sustainability
• What is the risk of emphasising short-term profits?

  It can jeopardise long-term stability and growth
• What should strategic decisions consider for businesses?

  Longer horizons, innovation, and market position
• What can cutting costs enhance?

  Profitability
• What is a potential downside of cutting costs?

  It may lead to quality reductions
• What can aggressive revenue maximisation lead to?

  Competitive pricing and potential price wars
• What are the benefits of perfect competition?

  Allocative efficiency
• What is a limitation of perfect competition?

  It lacks incentives for innovation
• What might monopolistic firms exploit?

  Pricing power to earn supernormal profits
• How can monopolistic firms benefit consumers?

  By investing in R&D and achieving economies of scale
• What influences wage determination?

  Market forces and bargaining power
• How can minimum wage laws affect wages?

  They can distort natural wage equilibrium
• What is a potential effect of greater labour market flexibility?

  Enhanced employment opportunities
• What is a downside of labour market flexibility?

  It may lead to job insecurity and inequality
• What do antitrust policies promote?

  Competition and consumer welfare
• What can overly stringent antitrust measures do?

  Stifle business growth and innovation
• What does regulation ensure in business?

  Fair practices and stakeholder protection
• What is a potential downside of excessive regulation?

  It can burden businesses
• What might deregulation boost?

  Efficiency in business operations
• What is a risk of deregulation?

  It may lead to market failures
• How does technology impact business?

  It drives efficiency and creates new markets
• What is a potential negative effect of technological advancements?

  It can render existing skills obsolete
• What can technological advancements lead to in the workforce?

  Workforce displacement