Compared to a firm that has many small plants, a firm with a few large plants is likely to have all of the following except which one?
A)fewer inputs
B)greater managerial diseconomies
C)greater availability of specialized capital
D)less managerial diseconomies

Question

Quizplus · Accepted Answer

A firm with a few large plants is likely to have greater managerial economies of scale, meaning that the cost per unit of production decreases as the size of the plant increases due to factors such as specialization, efficient use of machinery, and reduced transportation costs. However, a firm with few large plants may also face greater managerial diseconomies, as it may be more challenging for top management to effectively oversee and manage multiple large plants, leading to potential coordination issues and increased costs. Therefore, the correct answer is B, which is the only option that states the firm will not experience greater managerial diseconomies.

Compared to a Firm That Has Many Small Plants, a Firm