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Growth (Long Run Average Cost Curve (Average costs fall initially, since…

- - - - Coordination
        
        It's hard to coordinate every worker, especially where there's thousands of employees
      - Communication
        
        Workers may feel alienated & excluded as the firm grows - could lead to fall in productivity & increases in average costs as they lose motivation
      - Control
        
        Becomes harder to monitor how productive the workforce is, as the firm gets bigger
  - - - Might lead to higher wages since firms have to compete to attract scarce employees
        
        Is because the demand for labour exceeds supply
- - - - Managerial
        
        Bigger firms more able to specialise & divide their labour - can employ specialist managers & supervisors - lower average costs
      - Technological
        
        Bigger firms can afford to invest in more advanced & productive machinery & capital - lower their average costs
      - Financial
        
        Banks willing to lends loans more cheaply to bigger firms because deemed less risky - therefore, larger firms can take advantage of cheaper credit
      - Marketing
        
        Bigger firms can divide their marketing budgets across larger outputs, so average cost of advertising / unit is less than that of a smaller firm
      - Risk-bearing
        
        When firm becomes bigger, can expand production range - therefore, spread the cost of uncertainty
      - Purchasing
        
        Bigger firms can bulk-buy, means each unit will cost them less