Diseconomies of Scale

  • Created by: Frances
  • Created on: 27-05-13 17:32

Diseconomies of scale - Are caused by an increase in long run average costs beyond the point of the MES (minimum efficient scale).

Problems with communication - Large workforce may need extra costs to be incurred in making managers aware of what is going on.

Problems of coordination - Large firms have layers of management and several tiers of decision making, which can sometimes hinder change.


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