Here, candidates were required to explain internal economies of scale and to give any four disadvantages of large scale production.
The question was well attempted by very many candidates. Candidates showed apparent knowledge of the definition of economies of scale. Most of them also demonstrated good enumeration of the required points for question 5b but apparently failed to explain the points enumerated.
This accounted for low mark scores in this question.
Internal economies of scale are benefits enjoyed by a firm as the scale of production is increased.
. . .
The disadvantages of large scale production should include the following:
(1) Large scale production leads to mass production of standardized goods which neglect the specific and personal tastes of consumers,
(2) Large scale production may lead to monopoly.
(3) Inter personal relationships are low as the owner may not be able to know all his employees.
(4) A lot of wastes may be associated to large scale production due to carelessness and this may increase cost of production.
(5) The organization of large scale firms is usually more difficult.
Decisions may take longer time to be made due to the long chain of authority of the big firm.
