The situation that occurs when the addition of resources creates inefficiencies is known as ________.
A)diseconomies of scale
B)marginal utility
C)marginal returns
D)break-even

Question

Quizplus · Accepted Answer

When a company experiences diseconomies of scale, it means that increasing the number of resources, such as adding more workers, causes a decrease in efficiency and an increase in costs. This is often due to communication problems, coordination issues, and managerial challenges that arise as the organization gets larger. Therefore, choice A is the correct answer.

Choice B refers to the change in satisfaction that occurs when consuming an additional unit of a good or service, and choice C is related to the amount of additional output that results from increasing the amounts of labor, capital, or other inputs used in production. Choice D is the point at which a company's revenues equal its expenses and is not directly related to the situation described in the question.

The Situation That Occurs When the Addition of Resources Creates