Concept:Diseconomies of scale occur when a firm grows so large that its average production costs start to increase.
Explanation:This usually happens when the firm expands beyond its most efficient scale of operation.
At a very large size, the management finds it difficult to coordinate all the departments and production activities.
Communication becomes slow, and managers cannot easily supervise every part of the business.
The chain of command becomes too long, and decision-making becomes less effective.
Managers have to delegate many tasks, which reduces proper control and direction.
These coordination difficulties lower productivity and push up the average cost per unit.
Hence, diseconomies of scale result from problems in managing and coordinating production efficiently.
Answer:A. there are difficulties in coordinating production