Which of the Following Provides the Best Explanation for Diseconomies

question 33

Multiple Choice

Which of the following provides the best explanation for diseconomies of scale?

• A) the firm is too small to take advantage of specialization.
• B) large management structures may be bureaucratic and inefficient.
• C) if there are too many employees, the work place becomes crowded and people become less productive.
• D) average fixed costs are rising.

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Definitions:

Investment Demanded

Investment demanded refers to the total amount of spending by businesses and individuals on capital goods like machinery, buildings, and technology, to increase future productivity.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Uncertainty

The lack of complete certainty in situations, often due to incomplete information, that affects decision-making processes in economics and finance.

Market Interest Rates

The rates at which borrowers and lenders conduct transactions in the open market, influenced by the supply and demand for credit, inflation, and central bank policies.