When a firm becomes so large it is difficult to coordinate and control,it is most likely that
A) economies of scale have begun.
B) diseconomies of scale have begun.
C) average total cost begins to fall.
D) long-run average costs become negative.
E) there are increasing marginal returns to increasing the firm's plant size.

Question

Quizplus · Accepted Answer

When a firm becomes so large that it is difficult to coordinate and control, it is likely that diseconomies of scale have begun. This means that as the firm grows larger, the cost of producing each unit of output increases, leading to a decrease in efficiency and an increase in costs. This can be due to factors such as communication difficulties, bureaucracy, and a lack of specialized skills among employees.

When a Firm Becomes So Large It Is Difficult to Coordinate