A firm that has diminishing returns in the management's ability to use and disseminate information as it increases production in the long run BEST demonstrates:
A)economies of scale.
B)diseconomies of scale.
C)being too small for the relevant market.
D)not having enough managers.

Question

Quizplus · Accepted Answer

Diminishing returns in management's ability to use and disseminate information as production increases indicates the occurrence of diseconomies of scale. This means that as the firm grows, it becomes more difficult to manage and coordinate various functions, resulting in higher costs and lower efficiency.

A Firm That Has Diminishing Returns in the Management's Ability