Asked by Ranjani Ramaswamy on Jul 09, 2024
Verified
Diseconomies of scale often arise because higher production levels allow specialization among workers.
Diseconomies of Scale
Diseconomies of scale occur when a company or business grows to such a point that the costs per unit increase, opposite of achieving cost efficiencies through expansion.
Specialization
The process of focusing effort and resources on a limited number of activities to increase efficiency and productivity.
- Gain insight into the notion and outcomes of economies of scale as well as diseconomies of scale.
Verified Answer
KG
karina garciaJul 10, 2024
Final Answer :
False
Explanation :
Diseconomies of scale often arise due to inefficiencies associated with managing a larger workforce and operations, not because of specialization, which typically contributes to economies of scale by increasing efficiency.
Learning Objectives
- Gain insight into the notion and outcomes of economies of scale as well as diseconomies of scale.