The diseconomies of the scale are a disadvantage to a firm or an industry or an organisation. This necessarily increases the cost of production of a commodity or service. Further it delays the speed of the supply of the product to the market.
These diseconomies are of two types:
a) Internal Diseconomies of Scale
b) External Diseconomies of Scale
Internal Diseconomies of Scale:
When the scale of production increases beyond optimum limit, its efficiency may come down.
External Diseconomies of Scale:
The term “External diseconomies of scale” refers to the threat or disturbance to a firm or an industry from factor lying outside it.For example a bus strike prevents the easy and correct entry of the workers into a firm.Similarly the rent of a firm increases very much if new economic units are established in the locality.
