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What is Causes of Diseconomies of Scale about?
Diseconomies of scale occur when an increase in production leads to a greater increase in costs. This happens for various reasons such as the difficulty of managing a very large company, increases in input prices due to industry expansion, and congestion caused by a higher volume of transactions. Diseconomies can be internal, related to coordination problems in a large company, or external, when the actions of one company affect the costs of others.
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