GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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similar businesses in the area
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easy access to suppliers
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greater distance between senior staff and shop floor workers
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abundance of skilled labour
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Detailed explanation-1: -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-2: -There are internal types of diseconomies of scale, like technical, organizational and financial diseconomies, and external diseconomies of scale, like infrastructure.
Detailed explanation-3: -The answer is a. Diseconomies of scale occur when the average costs increase when the producer increases the number of goods and services it creates.
Detailed explanation-4: -Problems With Diseconomies of Scale It reduces effective communication in a company or business. It creates a leg between operations and the level of outputs. It causes a decline in motivation of employees, this is because they feel they are not doing enough or are less-valued and thereby become demotivated.