Which of the following is a reason why a firm would experience diseconomies of scale?
A) To finance an increase in the size of its plant a firm must borrow more money or sell more shares of stock.
B) As the size of the firm increases, it becomes more difficult to find markets where it doesn't already have operations.
C) As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants.
D) As the size of the firm increases, it must operate in other countries where differences in language, customs, and laws increase its average costs.
Answer: C
You might also like to view...
Which Fed policy would be part of a restrictive monetary policy?
A) Raising tax rates. B) Lowering the discount rate. C) Selling government bonds. D) Reducing the required reserve ratio. E) None of the above.
Gold certificates, special drawing rights, the reserve position of the IMF, and the holdings of foreign currencies represent:
A) physical assets. B) reserve assets. C) monetary assets. D) none of the above.