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 Form 3 Business Studies: Size and location of a firm lessons

Meaning and types of internal dis-economies of scale

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Answer Text:
Diseconomies of scale
-Refers to the problems that a firm experiences due to its expansion.
-They are classified into Internal and external diseconomies of scale.
Internal diseconomies:
-These are disadvantages that a firm experiences as a result of operating beyond the optimum size.
-Managerial diseconomies of scale.
-High overhead costs
-Slow decision making process
-Increased wastage
-High cost of inputs