Which of the following factors may explain diseconomies of scale?
A)Increasing returns to scale of inputs.
B)Specialization of labor.
C)Indivisible inputs.
D)Managerial diseconomies.

Question

Quizplus · Accepted Answer

Managerial diseconomies can arise when a firm becomes too large and complex, making communication and coordination among managers difficult and leading to inefficiencies. Managerial diseconomies can occur as a company grows larger and becomes more complex, leading to issues such as communication breakdowns and bureaucracy, which can increase costs and reduce efficiency. The other choices, increasing returns to scale, specialization of labor, and indivisible inputs, all generally contribute to economies of scale rather than diseconomies.

Which of the Following Factors May Explain Diseconomies of Scale