Firms

What the syllabus asks of you

• classification of firms In terms of primary/secondary/tertiary sectors and private/public sector, and the relative size of firms. Note: detailed knowledge of different types of structure of a firm is not required.
• small firms The advantages and disadvantages of small firms, the challenges facing small firms and reasons for their existence.
• causes and forms of the growth of firms Internal growth, for example increased market share. External growth, for example mergers.
• mergers Examples, advantages and disadvantages of different types of mergers: horizontal, vertical, and conglomerate.
• economies and diseconomies of scale How internal and external economies and diseconomies of scale can affect a firm/industry as the scale of production changes.