When a Firm Becomes So Large It Is Difficult to Coordinate

question 152

Multiple Choice

When a firm becomes so large it is difficult to coordinate and control,it is most likely that

• A) economies of scale have begun.
• B) diseconomies of scale have begun.
• C) average total cost begins to fall.
• D) long-run average costs become negative.
• E) there is increasing marginal returns to increasing the firm's plant size.

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Definitions:

Company's Success

The achievement of specific business objectives and goals, often reflected in financial performance, market share, and stakeholder value.

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and certain rights within the company.

Stakeholder

An individual, group, or organization that has interest or concern in an organization and can affect or be affected by the organization's actions, objectives, and policies.

Operations

The day-to-day activities involved in the running of a business for the purpose of producing value for the stakeholders; focuses on manufacturing and service processes.