The following are some of the ways/factors which the size of a firm may be determined:
- Level of output/volume of output
A firm’s size may be judged by the level of output. A large firm will produce on large scale, while a small firm will produce on small scale.
- Number of employs in the firm
A small firm is likely to employ only a few employees, while a large firm will most often employ many workers.
- Floor area covered by the premises
A firm with large floor area covered by premises may be said to be large.
- Size of the market controlled by the firm
Large firms control large proportions of the total market of a particular product. Small firms may only control a small size of the market.
- Capital invested
The larger the capital of the firm in terms of assets the larger the firm and vice versa.
- Methods of production adopted
A large firm will most often adopt capital intensive methods of technology, where operations will be highly mechanized while small firms use more labour then machinery.
- Sales of volume
Small firms have low levels of sales with a given period while large firms have huge levels of sales.