One reason that a firm may experience decreasing returns to scale is that greater levels of output can result in
A) a greater division of labor.
B) an increase in meetings and paperwork.
C) smaller inventories per unit of output.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

An increase in meetings and paperwork can lead to decreasing returns to scale because it can reduce the efficiency of the firm's operations.

One Reason That a Firm May Experience Decreasing Returns to Scale