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 specialised, 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

Difficulty in coordinating operations due to increased output is actually a reason why firms may experience diseconomies of scale, which is the opposite of economies of scale. Therefore, option D is the correct answer.

Which of the Following Is Not a Reason Why Firms