It refers to an effect that occurs in the production costs of a product, which will increase progressively generating more and more expenses for each product produced, it can then be said that the diseconomy of scales has an opposite effect to which is the economy of scale, since in it the cost of the product per unit produced can be reduced considerably as the number of products to be produced increases. This effect is very common that occurs when there is a percentage growth in production which is less than a percentage increase in inputs.
The diseconomy of scale could be considered as an external element that considerably affects the correct functioning of the economy, a clear example can be observed when an increase in the average costs of a given production occurs, which occurs when the level of production increases..
Diseconomies can be of two types: external and internal. The internal ones, on the other hand, are presented as a consequence of an extension of unique properties, their main cause being the probability of an increase in administrative costs, specifically in the costs of logistics and paperwork that what they do is raise more the Costs when the number of units produced is increased, in the same way this type of inconvenience is possible that can be avoided through an increase in technology that will allow to considerably reduce administrative and bureaucratic costs.
On the other hand, external diseconomies are a consequence produced by an increase in the group of firms that bring with them an increase in the costs of one or more of those that make up the group. In this diseconomy it is possible to find two ramifications, such as the technological ones (they occur when the prices of raw materials increase in an uncontrolled way, exceeding what the company can cover) and the monetary ones (when the delay in technological matter causes costs to increase thanks that the market causes the demand for your product to fall and the price to rise).
