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Firms can grow larger by

1.             internal growth

2.             mergers

3.             take-overs

Reasons for mergers

1.             ec of scale

2.             market domination

3.             stability

4.             diversification

5.             asset striping-taken over coz land+capital worth more than co.

Small firms still exist coz

1.             limited economies of scale

2.             being own boss

3.             immobility in factor markets-labour dont want to move

4.             goodwill-personal care

5.             banding together to bulkbuy

6.             specialists

7.             subcontracting to larger

8.             monopoly can favour existence of small firms


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