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Which of the following is a difference between firms that have high scalability and firms that have low scalability?

A. Marketing strategies
B. Size of the workforce
C. Operational efficiency
D. Level of customer satisfaction

1 Answer

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Final answer:

The main difference between firms with high scalability and firms with low scalability lies in their operational efficiency and ability to leverage economies of scale.

Step-by-step explanation:

In a business context, a key difference between firms with high scalability and firms with low scalability is their operational efficiency.

Firms that have high scalability are able to achieve greater operational efficiency by leveraging economies of scale. This means that as they increase the quantity of output, their average cost per unit decreases. For example, a larger factory can produce at a lower average cost than a smaller factory.

In contrast, firms with low scalability may struggle to achieve the same level of operational efficiency and may have higher average costs per unit of output.

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