Decreasing returns to scale eventually occur primarily because of:

CA Foundation · Business Economics · MTP · January 2026
Decreasing returns to scale eventually occur primarily because of:
(A) A. Exhaustion of natural resources
(B) B. Increasing difficulties of management, coordination and control
(C) C. Labor becoming less skilled
(D) D. Technology becoming outdated

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Increasing difficulties of management, coordination and control

Topics: Theory of Production and Cost

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