Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Business
Lesson Topic: the links between economies and diseconomies of scale and unit costs
Learning Objective/s:
  • Describe the relationship between economies of scale, diseconomies of scale and unit costs.
  • Explain the different types of economies of scale and common causes of diseconomies.
  • Apply the average‑cost formula to identify the minimum efficient scale.
  • Analyse how location decisions can support or limit the optimal scale of operations.
  • Evaluate real‑world examples of scale effects on business costs.
Materials Needed:
  • Projector and screen for diagram presentation
  • Whiteboard and markers
  • Handout with cost‑function worksheet
  • Calculator or spreadsheet software
  • Sample case‑study cards (e.g., retailer expansion)
  • Sticky notes for group brainstorming
 Introduction:
Begin with a quick poll: “What factors make a big factory cheaper per product?” Connect to prior learning on cost structures and set the success criteria: students will be able to link scale changes to unit‑cost movements and justify location choices.
Lesson Structure:
  1. Do‑now (5’) – short recall quiz on fixed vs variable costs.
  2. Mini‑lecture (10’) – introduce economies/diseconomies of scale and display the AC‑curve diagram.
  3. Guided practice (12’) – pairs calculate average cost for different output levels using the given cost function.
  4. Case‑study activity (15’) – groups analyse a location‑scale scenario with the checklist and record findings on sticky notes.
  5. Whole‑class debrief (8’) – discuss key economies, diseconomies and their link to location decisions; teacher checks understanding with concept questions.
  6. Exit ticket (5’) – each student writes one example of how a firm could achieve a lower unit cost by adjusting scale.
Conclusion:
Summarise that expanding production can lower unit costs up to the minimum efficient scale, after which costs rise. Collect exit tickets and remind students to complete the worksheet for homework, applying the cost formula to a new business scenario.