Which of the following is not a reason why firms experience economies of scale?
A)Technology can make it possible to increase production with a smaller increase in at least one input.
B)Workers and managers can become more specialized, enabling them to be more productive.
C)Larger firms may be able to purchase inputs at lower costs than smaller competitors.
D)As output increases, the managers can begin to have difficulty coordinating the operations of their firms.

Question

Quizplus · Accepted Answer

Option D is not a reason why firms experience economies of scale. It is a potential problem that may arise as firms grow larger. As output increases, coordinating the operations of the firm may become more challenging for managers. However, this does not negate the benefits of economies of scale that arise due to factors such as technological improvements, specialization, and lower input costs.

Which of the Following Is Not a Reason Why Firms