ECONOMICS
TECHNOLOGY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
the SR ATC rises when MC increases
|
|
|
of difficulties in managing a large business
|
|
|
firms must be large relative to the market to employ efficient production techniques
|
|
|
MP declines as more units of a variable input are added to a fixed input
|
Detailed explanation-1: -Answer and Explanation: Option a is correct. Diseconomies of scale comes from difficulty of managing in the progressively increase in manpower and coordinating of the function of a large business due to its growth.
Detailed explanation-2: -An overcrowding effect within an organization is often the leading cause of diseconomies of scale. This happens when a company grows too quickly, thinking that it can achieve economies of scale in perpetuity.
Detailed explanation-3: -The primary cause of diseconomies of scale is increased specialization of labor. If a firm has constant returns to scale in the long run, the total cost of producing its product does not change when it expands or contracts its output.
Detailed explanation-4: -Types of Diseconomies of Scale Internal diseconomies are factors that are directly controlled by the firm. For instance, the organizational structure and process management can become too complex if it is not controlled efficiently.