Diseconomies of scale:

Question

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Diseconomies of scale are the increasing costs per unit of output that a firm experiences as its size increases beyond a certain level. This typically occurs in the long run when a firm's fixed costs, such as capital investments and management overhead, begin to outweigh the benefits of increased production. In contrast, short-run production may still experience economies of scale as variable costs decrease with increased output. Diseconomies of scale are not synonymous with either increasing or diminishing returns, which refer to changes in output in response to changes in inputs.

Diseconomies of Scale