The main source of diseconomies of scale is
A) dimensional factors associated with many physical relationships.
B) specialization of labor.
C) limits to the efficient functioning of management.
D) constant returns to scale.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when firms become too large and inefficient due to increased coordination and communication costs, as well as the difficulty in effectively managing a large workforce. This is primarily a management issue and is not related to physical or specialized labor factors. Constant returns to scale, on the other hand, occur when a firm's output increases proportionally to its inputs, and do not result in economies or diseconomies of scale.

The Main Source of Diseconomies of Scale Is