Which of the following is true regarding managerial diseconomies?
A)Managerial diseconomies incentivize vertical integration.
B)Managerial diseconomies are a cost associated with vertical integration.
C)Managerial diseconomies incentivize forward integration.
D)Managerial diseconomies incentivize backward integration.

Question

Quizplus · Accepted Answer

Managerial diseconomies refer to the increased costs and inefficiencies that can occur when a firm becomes too large and complex to be managed effectively. This cost is associated with vertical integration because integration means that the firm is taking on more activities and becoming more complex, potentially leading to managerial diseconomies. Therefore, choice B is the correct answer. Choices A, C, and D are incorrect because none of them are related to managerial diseconomies.

Which of the Following Is True Regarding Managerial Diseconomies