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Question
When firms grow larger, they sometimes add many additional layers of managers between the top executives and the entry-level employees. Because these managers do not actually produce any output themselves, we expect more layers of management to lead to
a. diminishing marginal returns.
b. diseconomies of scale.
c. economies of scale.
d. constant returns to scale.
e. increasing marginal returns.
Answer
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Related questions
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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