Diseconomies of Scale Is a Result of

question 98

Multiple Choice

Diseconomies of scale is a result of

• A) mismanagement.
• B) difficulties of coordinating and controlling a large enterprise.
• C) specialization of labor, capital, and management.
• D) technological progress.
• E) larger fixed costs as the firm's production increases.

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Definitions:

Net Operating Income

Profits derived from a company's everyday business operations, excluding taxes and interest charges.

Variable Cost Per Unit

The expense associated with producing one additional unit of product, which changes with the level of output.

Annual Fixed Costs

Costs that do not vary with the level of production or sales volume within a certain range and time period, such as rent, salaries, and insurance.

Turnover

A financial metric indicating the rate at which a company's inventory or assets are replaced through sales in a given period.