O-LevelEconomicsMicroeconomic decision makers2281/12 · May/June 2023 · Q161 Mark

What could cause internal diseconomies of scale for a firm?

Afall in demand for the products produced by the firm

Bmerger with another firm that results in slower decision-making

Cspending more on research and development to create new products

Dthe lack of skilled labour in the geographical area where the firm is based

✓ Correct answer

B: merger with another firm that results in slower decision-making

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2023 Paper 1 Variant 2, question 16.

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