Examkin

Question

Difficulty: EasySmall Scale and Large Scale Production

Which of the following advantages is most commonly associated with a small-scale business enterprise when compared to a large-scale firm?

  1. Ability to maintain close personal contact with customersAnswer
  2. B
    Enjoyment of extensive technical economies of scale
  3. C
    Implementation of complex division of labour across specialized departments
  4. D
    Earning interest as the primary reward for entrepreneurial risk-taking

Answer

The ability to maintain close personal contact with customers is a major advantage of small-scale production.
Small-scale enterprises feature direct owner-manager participation and smaller customer bases, allowing them to establish personal relationships, offer tailored services, and respond quickly to consumer preferences.

Step-by-Step Solution

1
Identify the core operational features of small-scale production.
Small-scale firms generally operate with lower capital, direct owner involvement, and a modest scale of operation.
Distinguishing small-scale characteristics helps isolate advantages specific to small business operations.
2
Compare the operational flexibility and customer relationship of small vs large firms.
The owner-manager structure in small firms allows direct interaction with clients, catering quickly to individual needs.
Close personal contact builds customer loyalty, which is difficult for large, complex corporations to replicate.

Key Concept

Advantages of Small Scale Production
Rate this question

Topics

Small Scale and Large Scale Production

More questions from this topic