WAEC Economics 2011 Theory — Question 13

Model answer

Small scale firms are common in West Africa because: (i) setting up small scale firms does not require large capital, (ii) it requires simple tools and techniques, not sophisticated machine like big firms, (iii) it requires small legal and administrative procedures to set up, (iv) it does not require much skill to manage and control like big firms, (v) government policy to create jobs for the ever-growing population, (vi) the size of the market - goods are small, therefore large scale production would lead to much waste (any five).