A diseconomy of scale is the opposite of an economy of scale. If some cost of a business rises with an increase in size, faster than the increase in size it is a diseconomy of scale. A more precise definition ...... more on: Diseconomies of scale
Decreasing returns to scale.
A condition in which, when a firm increases its plant size and labor employed by the same percentage, its output increases by a smaller percentage and its average total cost increases. (p. 278)
Features of a firm's technology that lead to rising long-run average cost as output increases.
Costs that rise faster than an increase in output; negative economies of scale... more on Diseconomies of scale
occurs when the cost per unit increases as a firm increases in size
The point at which an organisation exceeds its optimum capacity and costs increase as the size of an organisation or the scale of production increases.
Diseconomies of scale are the forces that cause larger firms to produce goods and services at increased per-unit costs. They are less well known than what economists have long understood as "economies of scale", the forces which enable larger firms to produce goods and services at reduced per-unit costs. Perhaps the only research that focuses explicitly on the forces behind corporate diseconomies of scale is http://canback.com/archive/thesis.pdf Canbäck (2002).
