If general electric finds that doubling both its plant size and the amount of associated inputs does not double its output level, then the firm is experiencing diseconomies of scale.
Diseconomies of scale are the financial disadvantages that economic actors experience as a result of growing their organizational size or their output, which leads to higher production costs per unit of goods and services. Economies of scale are opposed by the idea of diseconomies of scale. Diseconomies of scale are the characteristics of a business that cause average costs to rise as it expands past a particular size.
Technical limitations on the company's production process or organizational problems that raise costs without altering the actual manufacturing process are examples of internal diseconomies of scale.
Diseconomies of scale that are external might be caused by external environmental factors, restrictions on a firm's ability to use its resources, or other restrictions.
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