Question

Micro & Small Scale Enterprises
Scale of business determines the ___________.

• A. size of the business
• B. production of such business
• C. capital involved in business
• D. all of above

Answer 1

The correct option is D all of above

Requirement of capital: Certain businesses require huge investments and therefore have to be set up as large scale units. For e.g. Iron and Steel mills require huge investments in machinery, similar is the case with cement plants, power generation etc. Therefore in such cases, firms have to be set up as large scale units.

Variety of Production:More standardized is the product; larger may be the scale of operations. Firms producing less standardized and fashionable products tend to be smaller in size.

Business size refers to the scale of business operations; which determines the level of production and consequently the volume of sales.A business may be carried on a large scale or a moderate scale or a small scale.Businesses of all sizes have their own strengths and weaknesses. However, it is true that the size of business has much to do with the cost of operations and the size of profits.