diseconomies of scale

English

Noun

diseconomies of scale pl (plural only)

1. (economics) The characteristics that lead to an increase in average costs as a firm grows beyond a certain size.

   Antonym: economies of scale

   • 1978 June 28, “T.W.A. Seeking 5% Fare Rise”, in The New York Times‎^[1], →ISSN:

     In its application, the company cited “diseconomies of scale,” inflation and the diversion of normal traffic by Laker's Skytrain as reasons for seeking the increases.

   • 2020 January 17, Jonathan A. Knee, “Review: Competing in the Digital Age”, in The New York Times‎^[2], →ISSN:

     Growth at traditional organizations eventually hits a point beyond which the firm will “suffer from diseconomies of scale, scope and learning.” By contrast, “algorithm-driven operating models” of the A.I. economy are “almost infinitely scalable.”

   • 2020, Francesco Ducci, Natural Monopolies in Digital Platform Markets, Cambridge University Press, →ISBN, page 90:

     The capital costs involved in creating such an infrastructure are significant and some of the fixed costs can be diluted as output expands, but there may be some important diseconomies of scale in managing the infrastructure.

Further reading

• diseconomies of scale on Wikipedia.Wikipedia