Diseconomies of scale occur mainly because

A) of the law of diminishing returns.
B) firms in an industry must be relatively large in order to use the most efficient production techniques.
C) of the inherent difficulties involved in managing and coordinating a large business enterprise.
D) the short-run average total cost curve rises when marginal product is greater than average total cost.

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Sebastien Karram · Accepted Answer

Final Answer : C, Explanation :  Diseconomies of scale typically arise due to the complexities and inefficiencies associated with managing and coordinating large-scale operations, not because of the law of diminishing returns, the necessity for firms to be large to be efficient, or the relationship between marginal product and average total cost in the short run.

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