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Topic: Diseconomies of scale

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	Returns to scale - Wikipedia, the free encyclopedia
		When combined, economies of scale and diseconomies of scale lead to ideal firm size theory, which states that per-unit costs decrease until they reach a certain minimum, then increase as the firm size increases further.
		Economies of scale tend to occur in industries with high capital costs in which those costs can be distributed across a large number of units of production (both in absolute terms, and, especially, relative to the size of the market).A common example is a factory.
		Network externalities resemble economies of scale, but they are not considered such because they are a function of the number of users of a good or service in an industry, not of the production efficiency within a business.
	en.wikipedia.org /wiki/Economies_of_scale (800 words)

	Diseconomies of scale - Wikipedia, the free encyclopedia
		Diseconomies of scale are the forces that cause larger firms to produce goods and services at increased per-unit costs.
		They are less well known than what economists have long understood as "economies of scale", the forces which enable larger firms to produce goods and services at reduced per-unit costs.
		Perhaps the only research that focuses explicitly on the forces of corporate diseconomies of scale is Canbäck (2004) (PDF file).
	en.wikipedia.org /wiki/Diseconomies_of_scale (1712 words)

	FRBSF: Economic Letter - Efficiency of U.S. Banking Firms - An Overview (2/28/97)
		However, diseconomies of scale also are possible if the average production cost starts to rise with outputs beyond a certain volume of production.
		Scale diseconomies may arise because it may be more costly to manage a very large firm, or because the management of a very large firm becomes entrenched and therefore concerned more about maximizing their own welfare than that of shareholders.
		If the average cost curve is U-shaped--due to economies of scale at a low output level and diseconomies of scale at a high output level--it implies that there is an optimal scale of production at which the per unit average production cost is minimized.
	www.frbsf.org /econrsrch/wklyltr/el97-06.html (1739 words)

	"Bureaucratic Limits of Firm Size" by Staffan Canbäck (Site not responding. Last check: 2007-11-06)
		Williamson suggests that diseconomies of scale are manifested through four interrelated factors: atmospheric consequences due to specialisation, bureaucratic insularity, incentive limits of the employment relation and communication distortion due to bounded rationality.
		Furthermore, Williamson argues that diseconomies of scale are counteracted by economies of scale and can be moderated by adoption of the multidivisional organisation form and by high internal asset specificity.
		Thus, diseconomies of scale influence the growth and profitability of firms negatively, while economies of scale and the moderating factors have positive influences.
	www.canback.com /diss.htm (411 words)

	IB Note 4. Cost Curves Illustrating Scale Economies (Site not responding. Last check: 2007-11-06)
		The implication is that scale economies may be achieved simply by expanding operations in the existing plant.
		The ATC curve is properly understood as a short-run representation of the behavior of average cost as output is increased within a given plant; scale economies simply are not a phenomenon of the short-run for a single plant.
		Diseconomies of scale are illustrated by an upward sloping range of the long run envelope curve.
	facweb.furman.edu /~dstanford/ibnotes/mbnote5b.htm (273 words)

	Economies of scale - LearnThis.Info Enclyclopedia (Site not responding. Last check: 2007-11-06)
		In economics, economies of scale are situations where the cost of producing one unit of a good or service decreases as the volume of production increases.
		Network externalities resemble economies of scale, but they are not considered such because they are effects of the number of users of a good or service, not of efficiency within a business.
		On the other hand, Economies of scale external to the firm are not considered examples of network externalities despite the fact that they arise from similar non-market interactions with external resources.
	encyclopedia.learnthis.info /e/ec/economies_of_scale.html (269 words)

	IB Note 3. Economies of Scale in the Long Run
		Though perhaps not clearly understood, scale economies are attributable to "technological efficiencies" resulting from increasing the plant size, and are associated with greater specialization and division of labor.
		If plant size is increased too far, diseconomies of scale may result from the difficulties experienced by management in oversight, coordination, and control of the production process.
		Diseconomies of scale cause the cost curves for even larger capacity plants to suffer higher altitude cost curves.
	facweb.furman.edu /~dstanford/ibnotes/ibnote1c.htm (743 words)

	Economies and Diseconomies of Scale (Site not responding. Last check: 2007-11-06)
		Economies of scale occur when long-run average total cost declines as output increases.
		Diseconomies of scale occur when long-run average total cost rises as output increases.
		Constant returns to scale occur when long-run average total cost does not vary as output increases.
	www.cameron.edu /~abduls/mpp/chap13/tsld050.htm (42 words)

	Tutor2u - Diseconomies of Scale
		Although economies of scale have the potential to increase both consumer and producer welfare, there are limits to the advantages that they can bring.
		The rise in LRAC is caused by diseconomies of scale.
		It is often difficult to pinpoint exactly the causes of diseconomies of scale.
	www.tutor2u.net /economics/content/topics/buseconomics/diseconomies.htm (271 words)

	Returns to Scale
		The definition of the concept of returns in to scale in a technological sense was further discussed and clarified by Knut Wicksell (1900, 1901, 1902), P.H. Wicksteed (1910), Piero Sraffa (1926), Austin Robinson (1932) and John Hicks (1932, 1936).
		Diagramatically, the idea of different returns to scale is thus captured by the degree to which isoquants are spaced from each other as we move along the ray from the origin.
		the elasticity of scale is the sum of the output elasticities with respect to factor inputs.
	cepa.newschool.edu /het/essays/product/returns.htm (5146 words)

	Managerial Economics : 6th Edition
		"Economies of scale" in production means that long run average costs decline as a firm's production level rises; this is characteristic of many types of production such as autos and cruise ships (as mentioned in chapter 9).
		Yet it is possible that a firm may become so large that any economies of scale are exhausted, and instead inefficiencies set in that cause average costs to rise as the already bloated production level increases even more.
		This situation is known as "diseconomies of scale;" graphically, it means that a firm is operating on the upward-sloping portion of its U-shaped long run average cost curve.
	www.wwnorton.com /web/mec6/econ_news.asp (544 words)

	Practice for Chapter 10
		The scale of operation associated with SRATC3 is realizing some economies of scale.
		The lowest-cost scale of operation to produce Q1 is SRATC1.
		The long-run average cost of producing 10 units of output is $60, while the long-run average cost of producing 11 units is $60.
	oak.cats.ohiou.edu /~shambora/practice_for_chapter_10.html (376 words)

	Long-Run Costs: Economies and Diseconomies of Scale
		When an increase in a firm’s scale of production leads to lower average costs, we say that there are increasing returns to scale or economies of scale.
		If an increase in a firm’s scale leads to higher average costs, we say that there are decreasing returns to scale or diseconomies of scale.
		And if a change in scale does not change average costs, we say that there are constant returns to scale.
	wps.prenhall.com /bp_casefair_econf_7e/0,8233,2030933-,00.html (181 words)

	Industrial Organization: Competitive Markets
		If the industry exhibits no external economies or diseconomies of scale, then the industry long run supply curve is perfectly elastic (horizontal).
		Lack of economies or diseconomies of scale means that growth of the industry doesn't foster technological improvements and doesn't change the prices of inputs.
		Often, however, external economies of scale mean that a single firm, or group of firms will come to dominate the market and the competitive assumptions will no longer hold.
	instruct1.cit.cornell.edu /Courses/econ101wissinkfall99/ppp/lecture-IO&competition.html (1628 words)

	Returns to scale -
		Returns to scale refers to a technical property of production that predicts what happens to output if the quantity of all input factors is increased by some amount.
		It is also a justification for free trade policies, since some economies of scale may require a larger market than is possible within a particular country — for example, it would not be efficient for Liechtenstein to have its own car maker, if they would only sell to their local market.
		As an example, the Cobb-Douglas functional form has constant returns to scale: the function itself is $F(K,L)=AK^{b}L^{1-b}$ , where A > 0 and 0 < b < 1.
	psychcentral.com /psypsych/Economies_of_scale (844 words)

	Techdirt: VoIP's Negative Economies of Scale
		Diseconomies of scale is the opposite: the cost per unit increases.
		This is a revenue issue, not a cost issue, therefore, using the term economies or diseconomies of scale is, well, wrong.
		Negative economies of scale or diseconomies of scale are both used quite often so your argument holds not much merit on that.
	www.techdirt.com /articles/20051007/1552235_F.shtml (1956 words)

	COST, REVENUE AND PROFIT CONCEPTS IN ECONOMICS
		An important contribution to economies of scale resides in the nature of knowledge and skills.
		Diseconomies of scale occur when average costs of production increase as output increases.
		Natural monopolies occur when large scale production allows one firm to produce the entire output for a market at a lower average cost than any one of a number of firms producing part only of the output for the market.
	www.spatialgovernance.com /economics/611lec02A.htm (2162 words)

	Whatever Happened to Globalization?
		Every CEO wants to run a business that has not only the power of scale but also the soul of a startup.
		To dominate an industry -- whatever the scale, whatever the business -- you simply have to have strong representation in the United States.
		This restructuring lets us operate on a more human scale, it pushes responsibility downward, and it quadruples the number of senior management positions.
	www.fastcompany.com /online/27/sorrell.html (3493 words)

	[No title] (Site not responding. Last check: 2007-11-06)
		C. external economies of scale, external diseconomies of scale
		D. external diseconomies of scale, external economies of scale
		A. is the process by which external economies of scale are transmitted throughout the economy.
	college.hmco.com /cgi-bin/SaCGI.cgi/ace1app.cgi?FNC=AcePresent__Apresent_html___eco_taylor2e_09 (470 words)

	Stumbling and Mumbling: Diseconomies of scale
		It's that there are diseconomies of scale, which cause larger firms to become inefficient.
		I mention all this because I suspect the taste for mergers is an example of the salience heuristic - the gains to mergers seem obvious, whilst the costs of them (difficulties in managing larger firms) are more hidden.
		I totally agree with what you say about diseconomies of scale (with the research I'm doing on organizational behavior, btw, I've got stacks of Canback articles out the wazoo).
	stumblingandmumbling.typepad.com /stumbling_and_mumbling/2005/12/diseconomies_of.html (937 words)

	What Are Economies Of Scale?
		When more units of a good or a service can be produced on a larger scale, yet with (on average) less input costs, economies of scale (ES) are said to be achieved.
		External economies of scale can also be reaped if the industry lessens the burdens of costly inputs, by sharing technology or managerial expertise, for example.
		Thus, while a decision to increase its scale of operations may result in decreasing the average cost of inputs (volume discounts), it could also give rise to diseconomies of scale if its subsequently widened distribution network is inefficient because not enough transport trucks were invested in as well.
	www.investopedia.com /articles/03/012703.asp (1245 words)

	[No title] (Site not responding. Last check: 2007-11-06)
		To avoid such difficulty, we now introduce the concepts, “economies of scale” and “diseconomies of scale”.
		Technology is said to have “economies of scale” if the long run average cost is decreasing.
		In the same way, technology is said to have “diseconomies of scale” if the long run average cost is increasing.
	www.unc.edu /~shingo/E101_note17_2004_fall.doc (310 words)

	Boyes/Melvin, Fundamentals of Economics, 2/e - Internet Exercises
		The author describes economies of scale that exist in introducing year 2000 compliance.
		Explain why such economies of scale might be present.
		Explain why the author believes that diseconomies of scale will also be present in providing year 2000 compliance.
	college.hmco.com /economics/boyes/fundamentals/2e/students/exercises/ch06_2.html (80 words)

	Essay or Coursework : As a leading authority on costs, you have been asked by the President of the Manufacturing ...
		Essay or Coursework : As a leading authority on costs, you have been asked by the President of the Manufacturing Consortium Forum (MCF, Sumitomo Yoshimitsu), to prepare a speech in which you discuss economies of scale and diseconomies of scale and their respective sources.
		As a leading authority on costs, you have been asked by the President of the Manufacturing Consortium Forum (MCF, Sumitomo Yoshimitsu), to prepare a speech in which you discuss economies of scale and diseconomies of scale and their respective sources.
		The term 'economies of scale' is used when a company's cost per unit of output falls as a result of the company's scale of production increasing.
	www.coursework.info /i/48719.html (449 words)

	Diseconomies of Scale
		An economic concept referring to a situation in which economies of scale no longer function for a firm.
		Diseconomies of scale can sometimes occur for the follow reasons:
		For example, if in a product required both gadget A and gadget B, diseconomies of scale might occur if gadget B is produced at a slower rate than gadget A. 2) As output increases, costs of transporting the good to distant markets can increase enough to offset any economies of scale.
	www.investopedia.com /terms/d/diseconomiesofscale.asp (257 words)

	Returns to Scale (Site not responding. Last check: 2007-11-06)
		This is also known as "diseconomies of scale," since production is less cheap when the scale is larger.
		If an increase in all inputs in the same proportion k leads to an increase of output of a proportion greater than k, we have increasing returns to scale.
		This is also known as "economies of scale," since production is cheaper when the scale is larger.
	william-king.www.drexel.edu /top/Prin/txt/MPCh/RtoS1.html (417 words)

	Oxfam America: Small Farms: The Optimum Sustainable Agriculture Model
		The agriculture sector is an exception to the principle of economies of scale: numerous studies actually find diseconomies of scale as farm size increases.
		The agriculture sector has, in fact, been identified as an exception to the principle of economies of scale.
		Numerous studies actually find diseconomies of scale as farm size increases.
	www.oxfamamerica.org /advocacy/art2570.html (971 words)

	Economics Interactive (Site not responding. Last check: 2007-11-06)
		For firms encountering diseconomies of scale, output is, on average: (a) more costly as the firm expands.
		This firm experiences diseconomies of scale beyond firm size: (a) a.
		(e) No diseconomies of scale are experienced.
	www.unc.edu /depts/econ/byrns_web/EC010/Econ10/EC10_past/Duke52D_Micro/Duke52Q08.htm (265 words)

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