The primary cause of diseconomies of scale is scarcity of machinery and capital.

Question

Quizplus · Accepted Answer

The primary cause of diseconomies of scale is inefficiency or coordination problems in large organizations. This can lead to increased transaction costs, communication problems, and bureaucratic obstacles that reduce productivity and increase costs. While scarcity of machinery and capital can be a limiting factor on production, it is not the primary cause of diseconomies of scale.

The Primary Cause of Diseconomies of Scale Is Scarcity of Machinery