What scenario depicts diseconomies of scale?

Diseconomies of scale occur when a company's production costs per unit increase as it expands output beyond its optimal capacity. This situation often arises from several factors such as increased complexity of management, communication difficulties, and inefficiencies that emerge when organizations grow too large.

In the selected scenario, expanding production beyond optimal capacity signifies that the firm is experiencing challenges associated with large-scale operations, leading to increased costs rather than the anticipated efficiencies. As production scales up too much, the advantages of large-scale operations may start to diminish, resulting in higher average costs per unit.

The other scenarios either indicate benefits of scaling (like decreasing costs with increased output), operational improvements (such as streamlining operations), or cost-cutting measures (like reducing workforce), which do not illustrate the concept of diseconomies of scale. Understanding this concept is crucial in recognizing the limits of scaling production in economics.