Question

Decreasing returns to scale may occur as increasing the amount of inputs used Select one:

a. increases specialization.
b. always increases the amount of output produced.
c. may cause coordination difficulties.
d. increases efficiency.

Answer 1

c. may cause coordination difficulties

Step-by-step explanation:

Decreasing returns to scale means output increases less than proportionately to the increase of inputs (less returns as scale increases).

(a), (b), (d) lead to more efficiency as scale increases => increasing returns to scale

(d) coordication difficulties make production less efficient, where less output can be made as more inputs are used => decreasing returns to scale