Which of the following may explain why decreasing returns to scale occur?
A)Diminishing marginal rate of technical substitution
B)The law of diminishing marginal utility
C)Managerial inefficiencies
D)Division and specialization of labor

Question

Quizplus · Accepted Answer

Decreasing returns to scale occur when output increases by a smaller proportion than the increase in inputs, often due to managerial inefficiencies as organizations become larger and more complex, making coordination and communication more challenging.

Which of the Following May Explain Why Decreasing Returns to Scale