Diseconomies of scale refers to the:
A)fall in an FI's average costs of production as its output decreases
B)fall in an FI's average costs of production as its output increases
C)fall in an FI's average costs of production as its output remains stable
D)increase in an FI's average costs of production as its output increases

Question

Quizplus · Accepted Answer

Diseconomies of scale refer to the increase in an FI's average costs of production as its output increases. This can occur due to various reasons such as difficulties in managing larger operations, increased bureaucracy, and inefficiencies in communication and decision-making. As the scale of operations grow, these factors can lead to higher costs, reducing the benefits of economies of scale.

Diseconomies of Scale Refers to The