Diseconomies of Scale Can Occur as a Result of Which

question 58

Multiple Choice

Diseconomies of scale can occur as a result of which of the following?

• A) Increasing marginal returns as the firm increases its size.
• B) Lower total fixed cost as the firm increases its size.
• C) Greater specialisation of labour and capital as the firm increases its size.
• D) Management difficulties as the firm increases its size.
• E) Increases in the labour force not matched by increases in the plant.

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Definitions:

Operating Cash Flow

The cash generated by a company's normal business operations, indicating whether a company can generate enough positive cash flow to maintain and grow its operations.

Net Working Capital

The financial contrast between a company's short-term assets and its short-term obligations.

Fixed Assets

Long-term tangible assets used in the operation of a business that are not likely to be converted to cash in the short term, such as buildings, machinery, and equipment.

Financially Solvent

The ability of an individual or organization to meet its long-term financial obligations.