Diseconomies of scale exist for all of the following reasons except:

Question

Quizplus · Accepted Answer

Diseconomies of scale arise when a company becomes too large and its costs per unit begin to increase. In this situation, the firm may be facing bureaucratic inefficiencies, management problems, failures in information flows, and organizational problems. However, the size of the firm being too small does not contribute to diseconomies of scale as smaller firms typically have lower costs per unit.

Diseconomies of Scale Exist for All of the Following Reasons