What are the causes of diseconomies of scale?

Diseconomies of scale occurs when the average cost of a product begins rising as a business expands. This may occur due to problems communicating: as a business expands it's chain of command increases which makes communication slow and more likely for errors to occur. Secondly, diseconomies of scale can also arise due to the problem of managing large businesses. It is difficult to coordinate and oversee operations if a business is large and, for instance, has various different departments and regions.

HZ
Answered by Hadiqa Z. Business Studies tutor

5809 Views

See similar Business Studies A Level tutors

Related Business Studies A Level answers

All answers ▸

What does the Blake Mouton Grid represent?


Describe each of the 4 elements of Tuckmans (1965) effective team development model.


Asses the likely impact on a domestic firm of a global merger with a bigger MNC (Multi-national corporation) 10marks


How do I get high marks in essay questions?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences