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diseconomies of scale

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diseconomies of scale

Increase in the average cost of production as output increases in the long run. Diseconomies of scale are said to arise because larger businesses find it more difficult to manage their resources, particularly their workers, than small firms. For example, a large firm may employ too many managers, which pushes up its average costs.



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4) Another advantage of the IT progress may come from reduction of managerial diseconomies of scale.
Diseconomies of scale exist when output increases and average cost increases as well.
Tree-farm constraints include a lack of liquidity associated with long-term timber management, an exceptional degree of risk, and diseconomies of scale.
 
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