When a Firm Grows Larger,many Additional Layers of Managers Are

question 16

Multiple Choice

When a firm grows larger,many additional layers of managers are sometimes added that do not actually produce any output.At the same time,the firm gains additional bargaining power over the prices it pays to its suppliers.If both of these factors have an equal effect,we would expect this firm to experience

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

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A river in the Canadian province of British Columbia, known for its salmon runs and as a popular spot for outdoor recreation.