CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Which of the following is the best explanation for diseconomies of scale?
A. Coordination problems
B. Indivisibilities
C. Diminishing returns
Explanation: Diseconomies of scale occur when long-run average cost rises. A good explanation for this is coordination problems resulting from the difficulty of managing large organizations. Answer C (diminishing returns) is a short-run problem that comes from the fact that all inputs cannot be adjusted, and is thus unrelated to diseconomies of scale.

User Contributed Comments 3

User Comment
Drzewes that's a nice one to lose points on !!!
azramirza whats indivisibilities??
LCMilkbone @Drzewes lmaooooooooo
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