define 'diseconomies of scale' and explain two problems that a firm might face because of this.
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Diseconomies of scale happen when a company or business grows so large that the costs per unit increase. ... With this principle, rather than experiencing continued decreasing costs and increasing output, a firm sees an increase in costs when output is increased.
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Diseconomies of scale happen when a company or business grows so large that the costs per unit increase. It takes place when economies of scale no longer function for a firm. With this principle, rather than experiencing continued decreasing costs and increasing output, a firm sees an increase in costs when output is increased.
two problems that a firm might face because of this are:
- Higher Costs of Resources. ...
- Greater Levels of debt and interest.
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