What are some disadvantages of diseconomics of scale?

Answer 1

Economies of scale are reductions in average costs attributable to production volume increases.

They typically are defined in relation to firms, which may seek to achieve economies of scale by becoming large or even dominant producers of a particular type of product or service.

A distinction can be made between internal and external economies of scales.

Internal economies of scale occur when a firm reduces costs by increasing production.

External economies of scale occur when an entire industry benefits from expansion; for example, through the creation of an improved transportation system, a skilled labor force, or by sharing technology.

Answer 2

They limit how big the company can get and still stay profitable.

Disceonomies of scale mean that average cost is increasing in quantity; eventually, average cost becomes higher than the market price and the firm can't break even any more. (Of course, the firm would stop producing a long time before that; they want to maximize profit, not merely break even.)

Answer 3

Assuming you mean "economies of scale" what that means is that as the size (scale) of an enterprise grows, there are opportunities for it to find savings (economy) in its operations.

To take an example I am intimately familiar with, if you want to get a flyer printed, say you need 100 copies. The print shop will charge you one fixed cost for the set-up and a minimum amount of time on the press, plus the cost of the paper and ink.

So, say the set-up and one hour of press time is $80, and the paper costs $20 for 100 sheets. The total charge is $100 -- $1 per flyer.

Now say you up that 1000 flyers. Paper is a nickel per sheet, so your paper costs shoot up to $200. But the set-up and press charge stays the same at $80, for a total charge of $280. Now you're paying just 28 cents per flyer. That's the economy of scale.

Answer 4

what is global ression