Theory question 109
Business OrganisationsSection B (answer four questions only from this section)
What factors determine the size of a firm?
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Model answer
Size of the market (demand) for the product.
Availability of capital.
Nature of the product (perishable or personal services favour small firms).
Managerial ability of the entrepreneur.
Availability of raw materials and other factors.
Level of technology used.
Type of business organisation (sole trader versus company).
Government policy (licensing, incentives, controls).
Economies and diseconomies of scale.
Explanation
Explain each factor briefly.