A firm that is experiencing diminishing returns in management's ability to use and disseminate information as it increases production in the long run is an example of:
A) economies of scale.
B) diseconomies of scale.
C) being too small for the relevant market.
D) not having enough managers.

Question

Quizplus · Accepted Answer

Diminishing returns in management's ability to use and disseminate information as production increases is a characteristic of diseconomies of scale. This occurs when a firm becomes too large and complex to effectively manage and coordinate operations, resulting in increased costs and decreased efficiency.

A Firm That Is Experiencing Diminishing Returns in Management's Ability