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Basic Question 2 of 5
Which of the following provides the best explanation for diseconomies of scale?
B. Reduced monitoring costs
C. Higher resource prices
D. Indivisible set-up costs
A. The presence of fixed inputs
B. Reduced monitoring costs
C. Higher resource prices
D. Indivisible set-up costs
User Contributed Comments 3
| User | Comment |
|---|---|
| Oksanata | where did they get that invisible set-up costs for economies of scale? I see only mass production is more economical+specialization of labor+workers tend to learn more from their experience...What's that invisible set-up costs? |
| schweitzdm | I am not sure, @Oksanata. I checked the CFAI book and didn't see it either, but I might have missed it! The topic is discussed around page 127 of the Econ book. |
| Huricane74 | @Oksanata: InDIvisible set up costs are fixed costs. From an accounting point of view, these are costs that all allocated based on the quantity produced or over a period of time. |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
evaluate a company's operating profitability and working capital using key measures
CFA® 2025 Level I Curriculum, Volume 3, Module 5.