Teaching guide: Business in the real world

With a focus on unfamiliar topics, we’ve created this teaching guide to support you in planning your lessons.

Stakeholders

This topic works with Setting business aims and objectives

Expanding a business

Economies/diseconomies of scale

Classroom activities

• Calculation exercises. For example, get students to calculate the impact of 5% saving on bulk purchases of some materials, 7% on others.
• Watch Introduction to economies of scale, links can be made to the factors of production by considering the costs involved in each factor – land, labour, capital and enterprise.

Unit cost

Students need to understand the reasons for changes to unit cost, and to interpret cost curves that illustrate the changes in unit cost according to the quantities produced.

Classroom activities

Show students images of unit cost curves, which illustrate the concept of economies and diseconomies of scale and its impact on unit cost.