Economics A-Level
Economies and Diseconomies of Scale
What Economies and Diseconomies of Scale means in Economics A-Level, as defined for Pearson Edexcel.
Definitions of Economies and Diseconomies of Scale
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
Long-run analysis of how increasing the scale of production leads to lower long-run average costs (LRAC) through technical, managerial, and financial efficiencies, or higher costs due to communication and coordination failures.
Analysis of long-run average cost (LRAC) curves, identifying technical, financial, and managerial efficiencies gained through size, alongside the risks of communication breakdown and alienation in large-scale organizations.
Topics that use Economies and Diseconomies of Scale
- Business growth (Pearson Edexcel A-Level)
- Revenues, costs and profits (Pearson Edexcel A-Level)
Related terms
- Market Concentration and Regulation
- Organic vs. Inorganic Growth
- Profit Maximisation vs Alternative Objectives
- The Law of Diminishing Marginal Returns
Using Economies and Diseconomies of Scale in the exam
Definition questions usually carry one or two marks, and examiners look for the precise wording. Write the definition from memory, check it against the version above, and then use the term in a longer answer on the same topic so it sticks.
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