Reasons for diseconomies of scale
Diseconomies of scale occur when a firm grows so large that its cost per unit starts to rise. Poor communication and management problems are the main causes.
Real World
After Meta grew to over 80,000 employees in 2022, CEO Mark Zuckerberg publicly admitted the company had become too slow and bureaucratic, cutting 11,000 staff to restore efficiency.
Exam Focus
For 'explain' questions, always link the cause (e.g. poor communication) to the mechanism that raises average cost — don't just name the cause.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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