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

6044 Views

See similar Business Studies A Level tutors

Related Business Studies A Level answers

All answers ▸

What are the five levels in Maslow's Hierarchy of Needs?


What is a PESTLE analysis and when are they used?


Assess & Compare the Advantages and Disadvantages of TQM with Quality Control.


Analyse one way in which having seasonal patterns of demand may affect the operational decisions of a business.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning