Terms Beginning With 'd'

Diseconomies of Scale

  • January 15, 2020
  • Team Kalkine

Diseconomies of Scale is a situation wherein a business entity becomes very large and as a result its per-unit costs increase, leading to reduced profitability. When an entity expands, its per-unit cost increases with a rise in compliance cost, employee cost, administration cost etc. Both internal (organizational issues within the corporate structure or technical issues of production) and external forces (environmental constraints) can result in diseconomies of scale.

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