Rationalisation
What Rationalisation means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Rationalisation
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Reference: Pearson Edexcel
The reorganisation of a firm's operations to increase efficiency and reduce costs, which may involve downsizing, relocating, or closing unprofitable divisions.
Selling surplus assets or downsizing the workforce, thereby reducing maximum capacity so that it aligns with current demand.
Topics that use Rationalisation
- Capacity utilisation (Pearson Edexcel A-Level)
- Growing economies (Pearson Edexcel A-Level)
Related terms
- Base year
- Cost management
- Demand-pull inflation
- Economic growth
- Efficiency
- Emerging markets
- Expanding capacity
- Foreign direct investment (FDI)
Using Rationalisation in the exam
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