As diseconomies of scale begin to outweigh the economies of scale,

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When diseconomies of scale start to outweigh the economies of scale, it means that as the firm expands its production, it starts experiencing inefficiencies and increased costs. This could be due to issues such as increased communication problems, management difficulties, and coordination challenges. As a result, the long-run average cost (LRAC) curve, which shows how the average cost of production changes as the firm expands its production over the long run, starts to slope upward. This means that the firm's cost per unit of output increases as it expands its production, making it less efficient and potentially less profitable.

As Diseconomies of Scale Begin to Outweigh the Economies of Scale