Lesson 1.6.1

1.6.1 Business size and growth Quiz: OCR Business, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 1.6.1, Business size and growth: 20 multiple choice questions for the OCR Business (H431), Unit 1: Introduction to Business, written with Revision Ninja.

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The 20 questions

  1. What measure of business size calculates total value of issued shares?

    • Total turnover
    • Capital employed
    • Market capitalisation
    • Market share

  2. Which method of expansion relies on using internal resources to grow sales?

    • Conglomerate merger
    • Horizontal integration
    • Organic growth
    • Joint venture

  3. What type of integration occurs when a business merges with a competitor at the same stage?

    • Backward vertical
    • Forward vertical
    • Horizontal integration
    • Conglomerate integration

  4. Which cost advantage occurs when large firms negotiate lower unit prices from suppliers?

    • Purchasing economies
    • Financial economies
    • Managerial economies
    • Technical economies

  5. What term describes a merger between two completely unrelated businesses?

    • Horizontal merger
    • Vertical merger
    • Lateral merger
    • Conglomerate merger

  6. Which measure of size counts the total sales value generated over a year?

    • Market capitalisation
    • Capital employed
    • Turnover
    • Profit margin

  7. What main advantage allows small firms to adapt quickly to changing customer needs?

    • Flexibility
    • Economies of scale
    • Market dominance
    • Financial power

  8. What term describes rising average costs caused by a business growing too large?

    • Diseconomies of scale
    • Minimum efficient scale
    • Economies of scale
    • Marginal cost

  9. A car maker buys a tyre manufacturing company. What type of integration is this?

    • Backward vertical
    • Conglomerate
    • Forward vertical
    • Horizontal

  10. A bakery opens three new shops in neighbouring towns using profits. What growth method is this?

    • External growth
    • Horizontal merger
    • Organic growth
    • Joint venture

  11. A firm has 1,000,000 shares priced at £3 each. What is its market capitalisation?

    • £1 million
    • £3 million
    • £30 million
    • £300,000

  12. A supermarket chain buys a local dairy farm. Which specific integration strategy is this?

    • Backward vertical
    • Horizontal
    • Diversification
    • Forward vertical

  13. A fashion retailer buys a retail clothing chain. What type of growth is this?

    • Forward vertical
    • Horizontal integration
    • Conglomerate
    • Backward vertical

  14. An oil refinery buys a chain of petrol stations. What type of integration is this?

    • Backward vertical
    • Conglomerate
    • Forward vertical
    • Horizontal

  15. A firm's unit cost rises from £5 to £7 as output doubles. What is happening?

    • Diseconomies of scale
    • Technical efficiency
    • Purchasing power
    • Economies of scale

  16. Which strategy allows a small firm to survive alongside giant competitors in an industry?

    • Mass production
    • Heavy advertising
    • Operating in niches
    • Price wars

  17. Why might employee numbers be a misleading measure when comparing tech and retail firms?

    • Profit margins align
    • Capital intensity differs
    • Turnover is identical
    • Prices are fixed

  18. What is a major financial risk associated with rapid over-expansion beyond resources?

    • Liquidation surplus
    • Overtrading
    • Overcapitalisation
    • Under-gearing

  19. Which internal diseconomy of scale occurs when messages become distorted across management layers?

    • Communication breakdown
    • Purchasing inefficiency
    • Managerial specialisation
    • Technical failure

  20. Which benefit of large size enables a business to spread marketing costs across huge sales?

    • Risk-bearing economies
    • Marketing economies
    • Technical economies
    • Financial economies

All OCR Business quizzes