When firms grow larger they sometime add many additional layers of managers between the top executives and the entry-level employees Because these managers 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

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Business

Camryn Solis

5 May, 15:41

When firms grow larger they sometime add many additional layers of managers between the top executives and the entry-level employees Because these managers 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

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Bailey Calhoun · Answer 1

Answer: c. diseconomies of scale

Explanation: Because these added managers do not actually produce any output themselves, it is expected that more layers of management to lead to diseconomies of scale. Diseconomies of scale is occur when the expansion of output comes with increasing average unit costs i. e. they are the cost disadvantages that economic actors incur as a result of an increase in the size of a firm or on output, leading to production of goods and services at increased per-unit costs.

Diseconomies of scale can involve factors internal to an operation (from technical issues of production or organizational issues within the structure of a firm or industry) or external conditions beyond a firm's control (due to constraints imposed by the environment).