--%>
Assignment Help - homework help

Diseconomies of Scale

Diseconomies of Scale:

The diseconomies are the drawbacks occurring to a firm or a group of firms due to big scale production.

Internal Diseconomies of Scale:

When a firm continues to grow and develops beyond the optimum capacity, the economies of scale fade away and diseconomies will begin operating. For illustration, when the size of a firm rises, after a point the difficulty of management occurs to that specific firm that will raise the average cost of production of that firm. This is termed as internal diseconomies of scale.

External Diseconomies of Scale:

Beyond a certain phase, too much localization and concentration of industries will generate diseconomies in production that will be common for all firms in a locality. For illustration, the expansion of an industry in a particular region leads to high rents and costs. These are the external diseconomies as this affects all the firms in the industry situated in that specific area

   Related Questions in Microeconomics

  • Q : C why cotton textile tndustry is a

    why cotton textile tndustry is a microeconomic study

    		•
  • Q : Illustration of zero Consumer Surpluses

    Clark pays $99.95 for the latest fishing rod. When Clark was willing to pay just a maximum of $99.95 for that fishing rod, his consumer surplus equivalents: (1) zero. (2) Clark would not be willing to buy the fishing rod at $99.95. (3) $99.95. (4) Clark would be bette

    		•
  • Q : Problem on amount of goods in

    The Economics students are most probable to recall conceptually the different determinants of amounts of a good which people will purchase when they contemplated an acronym based on how: (i) Much they will spend out of their initial paycheck whenever

    		•
  • Q : Consumer behaviour Graphical

    Graphical representation of relationship between MPC and multiplier?

    		•
  • Q : Maximizing firm profit conflicts with

    Whenever maximizing the firm profit conflicts with self-interests of business managers, this can lead to the: (i) Principal-agent problems. (ii) Negative accounting gain. (iii) Maximization of the revenues. (iv) Negative economic gain.

    Q : Normal profit Normal profit signifies

    Normal profit signifies zero economic profit. Explain why?

    		•
  • Q : Competitive Markets-Labor unions The

    The Purely competitive labor markets are not characterized through: (1) Most of the individual sellers and buyers of labor services. (2) Wages equivalent to the marginal resource costs. (3) Labor unions. (4) Price taking sellers and buyers of the labo

    		•
  • Q : Aggregate Supplies of Labor The

    The Supplies of labor from a specified population mainly depend on the: (1) Structure of wage rates. (2) Labor force participation rates of different population sub-groups. (3) Individual preferences for the work and income versus the leisure. (4) Levels of investment

    		•
  • Q : Inconsistent of demand with standard

    The curve which is so inconsistent along with standard consumer theory which is based only on the substitution result, this could not possibly be a demand curve for any standard kind of consumer good is: (1) curve D1D1. (2) curve

    		•
  • Q : Contribution Standard for Income

    Staunch defenders of the contribution standard for income distribution would not argue that: (w) people must receive income at least commensurate along with survival needs. (x) equity requires people to be rewarded as per their marginal productivity.

    		•