Decreasing returns to scale may occur because increasing the amount of inputs used
A)increases specialization.
B)always increases the amount of output produced.
C)may cause coordination difficulties.
D)increases efficiency.

Question

Quizplus · Accepted Answer

Increasing the amount of inputs used may lead to coordination difficulties, resulting in decreasing returns to scale. While increasing specialization and efficiency can lead to increasing returns to scale, it is not always the case that increasing inputs will result in these outcomes. Additionally, choice B is incorrect, as decreasing returns to scale means that output will not always increase with more inputs used.

Decreasing Returns to Scale May Occur Because Increasing the Amount