Difficulties in coordinating and transmitting information in a large firm can lead to
A) increasing returns to scale.
B) falling long-run marginal cost curves.
C) L-shaped long-run average total cost curves.
D) decreasing returns to scale.
E) linear total cost functions.

Question

Quizplus · Accepted Answer

Difficulties in coordination and transmitting information in a large firm can lead to decreasing returns to scale, as it becomes harder to efficiently allocate resources and coordinate production processes.

Difficulties in Coordinating and Transmitting Information in a Large Firm