Diseconomies of scale are known as the capacity cushion.

Name: Diseconomies of scale are known as the capacity cushion.
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Question

Quizplus · Accepted Answer

Diseconomies of scale refer to the increase in costs and decrease in efficiency as a company grows too large. The capacity cushion, on the other hand, refers to the extra capacity a company builds into its operations to account for unexpected changes in demand or production disruptions. These are two separate concepts, and therefore the statement is false.

Diseconomies of Scale Are Known as the Capacity Cushion