Author Question: Why do firms tend to experience decreasing returns to scale at high levels of output? A) Firms ... (Read 30 times)

Davideckstein7 · **on:** Jul 1, 2018

Why do firms tend to experience decreasing returns to scale at high levels of output?

A) Firms face more problems with coordinating tasks and communications among managers and workers at very high levels of output.
B) Government tax policy tends to discourage large-scale production operations.
C) Firms face fewer problems with inventory management and marketing as output reaches very high levels.
D) Firms tend to use more capital and less labor at higher levels of output.

Question 2

Refer to Scenario 17.5. If low effort is exerted, expected income is

A) 5000.
B) 5500.
C) 6000.
D) 6500.
E) 7000.