Diseconomies of scale exist for all of the following reasons except :
A) bureaucratic inefficiencies.
B) management problems.
C) failures in information flows.
D) firm size is too small.

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to the increase in costs per unit of output as the size of a firm or organization grows. This can happen due to bureaucratic inefficiencies, management problems, and failures in information flows. However, it does not happen because the firm size is too small. In fact, small firms may experience economies of scale, where the costs per unit of output decrease as the firm grows.

Diseconomies of Scale Exist for All of the Following Reasons