Diseconomies of scale arise primarily because

Diseconomies of scale arise primarily because: of the difficulties involved in managing and coordinating a
large business enterprise. beyond some point marginal product declines as additional units
of a variable resource (labor) are added to a fixed resource
(capital). firms must be large both absolutely and relative to the market
to employ the most efficient productive techniques available. the short-run average total cost curve rises when marginal
product is increasing.

Option 1. of the difficulties
involved in managing and coordinating a large business
enterprise.
Explanation:
Diseconomies of scale refers to the cost disadvantage when an
output of a firm goes beyond a certain limit. In the case of
diseconomies of scale, the average total cost increases. Firms face
diseconomies of scale primarily because when firms grow larger, it
becomes more and more difficult to manage and coordinate the entire
business and achieve cost efficiency.

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