Decreasing returns to scale may occur as increasing the amount of inputs used
A) increases specialization.
B) always increases the amount of output produced.
C) may cause coordination difficulties.
D) increases efficiency.

Question

Quizplus · Accepted Answer

When increasing the amount of inputs used, there may be coordination difficulties which can lead to a decrease in productivity and efficiency. This can result in decreasing returns to scale. A, B, and D do not necessarily cause decreasing returns to scale.

Decreasing Returns to Scale May Occur as Increasing the Amount