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29 March, 15:57

Firms may experience diseconomies of scale when Group of answer choices

average fixed costs begin to rise again.

there are too few employees, and managers do not have enough to do.

they are too small to take advantage of specialization.

large management structures are bureaucratic and inefficient.

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  1. 29 March, 17:02
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    The answer is D. large management structures are bureaucratic and inefficient

    Explanation:

    Diseconomies of scale is a situation which occurs when the marginal cost of a production increases as the output increases. It is a cost disadvantage.

    We have internal economies of scale and external economies of scale.

    1. Internal diseconomies of scale refers to factors which increase the cost of production of a product when its output increases. Examples are large management structures are bureaucratic and inefficient, inexperienced management etc.

    2. External diseconomies affects the whole industry. Example higher factor prices.
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