One of the most common reasons for wishing to produce on a larger scale is that the firm wants to avail of the economies of scale, which are not available at lower levels of output. Alternatively firms may wish to grow to gain market power in the hope that they will be able to influence the market and earn higher profit levels. In some cases firms may wish to grow simply to satisfy the ego of the owner(s). Others may wish to grow by expanding the range of products they produce in the hope that such diversification will allow them to spread the risk of sudden changes in demand or supply conditions.
lydiajane74 answered the question on July 4, 2018 at 20:53
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