Diseconomies of scale is
A) a short run phenomenon.
B) the result of decreasing marginal returns.
C) a long run phenomenon.
D) the result of increasing marginal returns.
E) possible only when the firm's plant size is fixed.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur in the long run when a firm's output increases to such a degree that the costs per unit start to increase. This is due to factors such as management inefficiencies, increased bureaucracy, and communication problems that can arise as firms become too large.

Diseconomies of Scale Is