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I think you should read the Wikipedia article I linked. Simply put, diseconomies of scale refers to inefficiencies that occur in large organizations.
by lend000 10y ago
I think you should read the Wikipedia article I linked. Simply put, diseconomies of scale refers to inefficiencies that occur in large organizations.
- js8 10y agoI actually did, but I don't think it disagrees with what I am saying - that it is a normative concept. In other words, some other form of human organization doesn't have to suffer from the same problems. Let me put it yet differently. If you fail to utilize economies of scale, nobody will profit. However, if "diseconomies of scale" do exist, then it's because someone profits from these. From the perspective of that person, it's not "diseconomy". I mean, you cannot use the Pareto-efficiency to say that everybody would be better off without "diseconomy", and so it cannot be a positivistic claim. And a little aside - public organizations are often inefficient because there are private companies profiting from them.