Diseconomies of Scale

Cards (3)

  • What is diseconomies of scale?
    When a business experiences increasing average unit costs as it increases its production scale
  • How does diseconomies of scale occur?
    When a company grows too large, leading to inefficiencies and decreased productivity
  • What factors can cause diseconomies of scale?
    • Inefficienct communication
    • Decreased motivation
    • Too complex organisational structure