A firm that has diminishing returns in the management's ability to use and disseminate information as it increases production in the long run is an example of:
A)economies of scale.
B)diseconomies of scale.
C)being too small for the relevant market.
D)not having enough managers.

Question

Quizplus · Accepted Answer

Diminishing returns in the management's ability to use and disseminate information as production increases is a sign of diseconomies of scale. This implies that the firm is becoming too big and complex, making it difficult for management to efficiently communicate and coordinate operations.

A Firm That Has Diminishing Returns in the Management's Ability