What are diseconomies of scale?
A)The situation where a firm's output decreases in proportion to the decrease in its inputs.
B)The situation where a firm is able to obtain lower prices for the inputs it buys because of bulk buying.
C)Bureaucratic inefficiencies in management that result in decreasing returns to scale.
D)The smallest level of output at which a firm is able to minimize long-run average cost.

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to the point where a firm's costs begin to increase as it continues to increase its output. This is often due to inefficiencies and management difficulties that arise as a result of the firm's increased size, such as bureaucracy and communication problems. Option A describes diminishing returns to scale, while option B describes economies of scale. Option D describes the concept of minimum efficient scale.

What Are Diseconomies of Scale