diseconomies of scale scenario

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Diseconomies of scale occur when a business grows too quickly and loses efficiency. This often happens in production situations where an increase in production is not matched by an increase in efficiency. Common diseconomies of scale causes include increased overhead costs, the need for more machinery and skilled labor, and an inability to use new technology. Such changes can lead to reduced efficiency and increased costs that outpace the increase in production. For example, a company that invests heavily in growing its production might find it more difficult to introduce new technology or labor-saving processes, subsequently leading to reduced efficiency.

Answered by Lisa

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