Reason for diseconomies of scale

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Reference no: EM131725037

1. Which one of these is NOT a reason for diseconomies of scale?

a. Distribution costs increase

b. Inflexibility may be an issue

c. Complexity increases costs

d. Fixed costs are spread over more units

2. You are considering either taking public transportation (first the BART and then the MUNI) or using a ZipCar to get to work. If you take public transportation, you will spend 5 dollars for each one-way trip. If you use the ZipCar, you will have to pay a flat rate of $50 a month and each one-way trip will cost you an additional $3.5. Would it ever be worthwhile to use the ZipCar and if so under what circumstances?

a. Yes, ZipCar is the less costly option if you take more than 14 one-way trips a month.

b. There is not enough information given to compare the two options.

c. No, ZipCar would never be worhwhile to use based on cost-volume analysis because the fixed cost is too high.

d. ZipCar is the less costly option if you take more than 23 one-way trips a month.

e. Yes, ZipCar is the less costly option if you take 34 or more one-way trips a month.

Reference no: EM131725037

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