Which of the following describes why a firm might experience diseconomies of scale?

Choose 1 answer:
(A) fixed plant size
(B) purchasing more efficient capital goods
(C) decreasing costs as plant size increases

D difficulties coordinating efforts
(E) specialization of labor

Question

Which of the following describes why a firm might experience diseconomies of scale?

Choose 1 answer:
(A) fixed plant size
(B) purchasing more efficient capital goods
(C) decreasing costs as plant size increases

D difficulties coordinating efforts
(E) specialization of labor

Accepted Answer

∻Solution∻ ‖ a ⋮ Diseconomies of Scale: Diseconomies of scale occur when a firm experiences an increase in average costs as it increases its output. This typically happens due to inefficiencies that arise from managing a larger scale of operations. ‖ ‖ b ⋮ Coordination Difficulties: As a firm grows, it may face difficulties in coordinating the efforts of its workforce and managing its resources effectively. This can lead to increased costs and inefficiencies. ‖ ‖ c ⋮ Answer Identification: Among the given options, the one that best describes why a firm might experience diseconomies of scale is "difficulties coordinating efforts." ‖ ∻Answer∻ ⚹ (D) difficulties coordinating efforts ⚹ ∻Key Concept∻ ⚹ Diseconomies of Scale ⚹ ∻Explanation∻ ⚹ Diseconomies of scale occur when a firm's average costs increase as it expands its production. This is often due to the complexities and inefficiencies that arise from managing a larger operation, such as difficulties in coordinating efforts. ⚹◊What impact does increasing plant size have on a firm's costs according to the concept of diseconomies of scale in Microeconomics?⍭ Generate me a similar question◊

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