Which of the following may contribute to diseconomies of scale?(*Multiple answers allowed*)
A) Increased worker specialization
B) Small firms joining purchasing groups
C) Too many machines in the factory increase risk of injury anddrive up injury compensations and insurance fees
D) Performance-based pay that better aligns the interests ofmanagers and shareholders
Expert Answer
Answer: Correct is C, which is “Too manymachines in the factory increase risk of injury and drives upinjury compensations and insurance fees” because diseconomies ofscale occur when company grow fastly and making more production asper time as well as demand. so, the company grows the productionalso grow and due to the increase
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