Which of the following provides the best explanation for diseconomies of scale?
A) the firm is too small to take advantage of specialization.
B) large management structures may be bureaucratic and inefficient.
C) if there are too many employees, the work place becomes crowded and people become less productive.
D) average fixed costs are rising.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when a firm grows too large, leading to inefficiencies such as bureaucratic management structures that hinder effective decision-making and coordination.

Which of the Following Provides the Best Explanation for Diseconomies