Understanding Diseconomies of Scale

What is meant by 'diseconomies of scale' in a business context?

• The average costs of production decrease with output.

• The average costs of production rise with output.

• The business experiences constant returns to scale.

• The business becomes more efficient as it grows.

Which of the following is a cause of inefficiency in large businesses due to diseconomies of scale?

• Improved communication

• Enhanced worker motivation

• Miscommunication

• Decreased resource prices

Why might control and coordination become more difficult as a business grows larger?

• There are fewer employees to manage.

• The business has less need for coordination.

• The complexity of operations increases.

• The business becomes more centralised.

How can demotivation occur in larger businesses?

• Workers feel more connected to decision makers.

• Workers feel their views are ignored.

• Workers receive more individual attention.

• Workers have fewer opportunities for advancement.

What is a potential consequence of overcrowding in a geographical area with similar businesses?

• Improved delivery times

• Reduced traffic congestion

• Late deliveries

• Decreased demand for labour

How does an increased price of resources affect businesses in a crowded area?

• It decreases the demand for labour.

• It increases the availability of resources.

• It leads to higher costs for businesses.

• It reduces competition among businesses.

What is a likely effect of miscommunication in a large business?

• Improved efficiency

• Enhanced employee satisfaction

• Increased errors and misunderstandings

• Streamlined decision-making processes

Which of the following is NOT a cause of diseconomies of scale?

• Miscommunication

• Control and coordination difficulties

• Increased motivation

• Overcrowding

What happens to the demand for labour when more businesses operate in the same area?

• It decreases significantly.

• It remains unchanged.

• It increases.

• It becomes unpredictable.

Which of the following best describes the relationship between business size and worker motivation in large businesses?

• Larger businesses always have more motivated workers.

• Worker motivation is unaffected by business size.

• Larger businesses may struggle to motivate workers.

• Smaller businesses have less motivated workers.