The situation where addition of resources creates inefficiencies is known as ________.
A) diseconomies of scale
B) marginal utility
C) marginal returns
D) break-even

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to the point where adding more resources or increasing production results in an increase in costs per unit instead of decreasing them, resulting in inefficiencies. This can happen due to various factors, such as communication issues, increased bureaucracy, decreased motivation among employees, etc. Hence, option A is the correct choice. The other options, such as marginal utility, marginal returns, and break-even, do not apply to this situation.

The Situation Where Addition of Resources Creates Inefficiencies Is Known