Examkin

Question

Difficulty: MediumSmall Scale and Large Scale Production

Despite the competitive pressure from large departmental stores, small-scale convenience shops located in residential neighborhoods continue to operate successfully. Which of the following represents a primary operational advantage that enables these small-scale producers and traders to survive?

  1. Offering personal attention and maintaining flexible operating hours tailored to local customersAnswer
  2. B
    Spreading fixed overhead costs over a massive volume of output to lower unit costs
  3. C
    Eliminating worker boredom and monotony by implementing extensive labor specialization
  4. D
    Operating without paying any financial returns or rewards to the capital factor of production

Answer

Providing personal attention and maintaining flexible operating hours tailored to local customers.
Small-scale enterprises survive competition from large firms because their intimate size allows owners to maintain personal contact with customers, adapt quickly to individual requests, and operate flexible hours convenient for the local community.

Step-by-Step Solution

1
Analyze the operational characteristics of small-scale business enterprises.
Identified key advantages including low capital requirements, direct owner contact with customers, flexibility, and localized service.
Small firms compete primarily on non-price factors like convenience and personal relations rather than economies of scale.
2
Evaluate the choices against small-scale scale of production principles.
Personal attention and flexible working hours directly explain small business survival against large-scale firms.
Large firms suffer from standardized, impersonal operations, creating a market niche for small firms.

Key Concept

Survival factors of small-scale enterprises
Rate this question

Topics

Small Scale and Large Scale Production

More questions from this topic