Why might firms experience diseconomies of scale?
What will be an ideal response?
The main reason for firms to experience diseconomies of scale is that there are limits to the efficient functioning of management. As a firm gets bigger, the layers of supervision grow, the costs of information and communication also grow more than proportionally so that the average cost increase.
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In England, the Thatcher government substituted a “poll tax” for the local property tax. People took strong exception to the tax, which is basically a head or “lump sum” tax. The principle of taxation such a tax violates is called
A. the benefits principle. B. the excess burden principle. C. the ability-to-pay principle. D. the constitutional principle.
Expansionary fiscal policy during a recession means cutting taxes, increasing government spending, or taking both actions.
Answer the following statement true (T) or false (F)