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diseconomy of scale
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diseconomy of scale

economics
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Quick Summary

Diseconomy of scale occurs when an increase in production facilities leads to a rise in the average cost per unit. This is the opposite of economy of scale, where increasing output typically lowers the average cost.12

Factors contributing to diseconomies of scale can include:
* Increased labor supply leading to communication challenges.
* Reduced specialization as operations become too large.
* Technological inefficiencies in massive facilities.
* Difficulty in managing and coordinating vast operations.1

Essentially, beyond a certain point, making more of something can become more expensive per item.

Summary created from Britannica articles using AI. AI can make mistakes, so verify using Britannica articles.
2 Britannica Sources
  1. economy of scale
  2. diseconomy of scale

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