IGCSE Business Studies 2025 – 400 Free Practice Questions to Pass the Exam

B is correct because diseconomies of scale refer to the phenomenon where, as a business grows in size or production output, the costs per unit can actually increase instead of decrease. This often occurs due to factors such as increased complexity, management difficulties, and communication issues within a larger organization. As companies expand, they may face challenges in maintaining efficiency and coordination, leading to higher operational costs, which is a significant problem associated with business growth.

The other options represent positive aspects of business growth. Increased employee satisfaction can result from the opportunities provided by growth, such as career advancement and job security. Higher market share typically indicates competitive success due to growth strategies leading to increased sales and customer base. The expansion of product variety often accompanies growth as businesses seek to attract and retain a broader customer base with diverse offerings, which is generally seen as advantageous rather than problematic.