When Firms Grow Larger,they Sometimes Add Many Additional Layers of Managers

question 74

Multiple Choice

When firms grow larger,they sometimes add many additional layers of managers between the top executives and the entry-level employees.Because these managers do not actually produce any output themselves,we expect more layers of management to lead to

• A) diminishing marginal returns.
• B) diseconomies of scale.
• C) economies of scale.
• D) constant returns to scale.
• E) increasing marginal returns.

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Definitions:

Collective Decision Making

The process in which a group, rather than an individual, makes a choice or judgment after considering various alternatives.

Economic Questions

Fundamental queries regarding how societies allocate scarce resources to produce goods and services for consumption, including what, how, and for whom to produce.

Allocation of Resources

The process of distributing available resources among various competing needs or uses to achieve desired objectives.

Political Decision Making

The process by which governments and political groups determine policies, allocate resources, and make crucial societal choices.