What is meant by economies and diseconomies of scale? Suggest the possible causes of each.

Economies of Scale:

The increase in efficiency of production as the number of goods being produced increases.

Diseconomies of Scale:

Rather than experiencing continued decreasing costs per increase in output, firms see an increase in marginal cost when output is increased

Labour Economies, 

Technical Economies, 

Managerial Economies, 

Marketing Economies, 

Financial Economies, 

Risk-spreading Economies

Difficulties in control and coordination eventually leads to inefficiency. Communication breakdowns. External Diseconomies  

Breakdown of relationships with suppliers and buyers , 

Control and communication problems  

Competition for labour 

Increasing employment costs 

Traffic congestion