A large firm may experience diseconomies of scale if there is ____________
A. difficulty in coordinating decisions B. division of labor in production C. employment of more specialist D. decrease in the cost of production
Correct Answer: A
Explanation
Diseconomies of scale occur when a firm or business grows so big that the costs per unit of output increase. If the firm becomes so large that it can no longer efficiently coordinate production activities, it will most likely experience diseconomies of scale.
