Question

When firms grow larger, they sometimes add many additional layers of managers between the top executives and the entry-level employees. Because these managers do not actually produce any output themselves, we expect more layers of management to lead to _____.(A) a diminishing marginal return.(B) increasing marginal returns.(C) diseconomies of scale(D) economies of sealed

Answer 1

The correct answer is letter "C": diseconomies of scale.

Step-by-step explanation:

Diseconomies of scale is a point where a business no longer experiences a decrease in cost per unit of output. Rather, after this point cost per unit tend to increase. Typically, diseconomies of scale arise when the increase in production represents an increase in the average unit per cost.