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Skills Learned
- Describe the principles of economies of scale
Study Guide
- Microsoft Learn: Economies of scale
- 🌐 Wikipedia: Economies of Scale

Practice Test

Question 1

As the company [A]____________ in size, they can [B]____________ price per unit for their customers. This is so called the principle of economies of scale.

❌ ✔ ⚪ 🔵 ⬜ 🟦 [A] grows, [B] increase

❌ ✔ ⚪ 🔵 ⬜ 🟦 [A] shrinks, [B] decrease

❌ ✔ ⚪ 🔵 ⬜ 🟦 [A] grows, [B] decrease

✔ That's correct

❌ That's not correct

👨‍🦱 💬 When companies grow in size, they become more effective at what they do. Thanks to this they can reduce their operational costs and therefore decrease their price per unit

Question 2

Small companies usually have a ____________ price per unit due to their scale.

❌ ✔ ⚪ 🔵 ⬜ 🟦 Low

❌ ✔ ⚪ 🔵 ⬜ 🟦 Medium

❌ ✔ ⚪ 🔵 ⬜ 🟦 High

✔ That's correct

❌ That's not correct

👨‍🦱 💬 Bigger companies can build internal teams, share resources, invest in research, negotiate prices, etc. All this leads to a lower price per unit. Unfortunately, small companies can’t do that which leads to a high unit per price.

Question 3

Which of the three best describes the benefits of the cloud?

❌ ✔ ⚪ 🔵 ⬜ 🟦 Economies of Scale

❌ ✔ ⚪ 🔵 ⬜ 🟦 Fixed pricing

❌ ✔ ⚪ 🔵 ⬜ 🟦 Cost unpredictability

✔ That's correct

❌ That's not correct

👨‍🦱 💬 Microsoft is a big company, Azure is also big. Because of that, their price per unit is low and as such customers can take advantage of competitive infrastructure and platform pricing. This is so-called economies of scale principle which is one of the cloud benefits.

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