Diseconomies of scale
What Diseconomies of scale means in Business GCSE, as defined for AQA, OCR.
Definitions of Diseconomies of scale
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Reference: AQA
Cost disadvantages that can appear when a business grows too large, causing average cost per unit to rise.
The rises in average cost per unit that can occur once a business grows beyond its efficient scale.
Higher costs and integration problems that can come with growth and may outweigh the benefits.
The cost disadvantages of growth that raise average cost beyond an optimum scale.
When a business grows so large that its average unit costs begin to rise, often due to poor communication or coordination.
Topics that use Diseconomies of scale
- Expanding a business (AQA GCSE)
- Business growth (OCR GCSE)
Related terms
- Economies of scale
- External growth
- Organic growth
- Takeover
- Fixed Costs
- Franchising
- Horizontal, vertical and conglomerate integration
- Internal (organic) growth
Using Diseconomies of scale in the exam
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