1. To what extent has Shropshire Hills Water plc benefited from increasing the scale of its operations? (18 marks)

2. Structure
What has happened to the company’s average unit costs over the years?
Use the text and be specific, have average costs increased or decreased and during what time periods.

3. Analysis - Balance
Using the text can you identify any examples of economies of scale present?
risk bearing, technical, managerial, marketing, purchasing, financial
Can you also identify any diseconomies of scale present
coordination, communication issues.

4. Evaluation - Conclusion
Trigger words: on balance, it depends, short term, long term
On balance do benefits outweigh costs of increasing scale?
Have economies of scale changed over time?