In the long run,decreasing returns to scale are likely to be caused by
A)diminishing returns to the variable factor.
B)decreasing costs.
C)increasing specialization of labour.
D)a decrease in factor prices.
E)diseconomies of scale associated with management problems.

Question

Quizplus · Accepted Answer

In the long run, decreasing returns to scale are often due to diseconomies of scale, which can arise from management inefficiencies as a firm grows too large.

In the Long Run,decreasing Returns to Scale Are Likely to Be