Describe how an accounting firm could experience diseconomies of scale
Problems with coordination can cause diseconomies of scale. Suppose the firm hires so many new workers that management is unable to monitor the number of tax returns they can produce (output). Suppose the additional employees are not as productive as the previous employees; perhaps they spend too much time chatting with each other or checking their email and Facebook pages. As the firm expands, output increases but at a decreasing rate. At some point, long-run average total costs can increase.
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A large majority of the personal computers (PCs) in the United States use an operating system purchased from Microsoft. Microsoft's relationship with PC manufacturers is an example of which of Porter's competitive forces?
A) the bargaining power of suppliers B) the threat from new entrants C) the bargaining power of buyers D) competition from substitute goods or services
The difference between scarcity and a shortage is that
A) scarcity is caused by poverty and shortages are caused by natural disasters. B) shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors. C) scarcity always is a part of human life while shortages usually are temporary. D) shortages are always part of human life while scarcity is usually temporary.
According to economist Milton Friedman, a. the short-term validity of the Phillips curve is questionable
b. there might be a short-term trade-off between unemployment and inflation but not a permanent trade-off. c. trade-off happens between unemployment and inflation happens in the long run but not in the short run. d. the long-run trade-off between unemployment and inflation comes from unanticipated inflation.
Total cost of production is the sum of total variable cost and total fixed cost. If the total fixed cost alone increases:
A. the average total cost curve shifts downward at all output levels. B. the marginal cost curve shifts upward at all output levels. C. the vertical distance between the average total cost curve and average variable cost curve increases at all output levels. D. the average variable cost curve shifts upward at all output levels.