The diseconomies of the scale are a disadvantage to a firm or an industry or an organization. It increases the cost of production. These diseconomies are of two types.
1. Internal diseconomies:
When the scale of production increases beyond the optimum limit, its efficiency may come down.
2. External diseconomies:
It refers to the threat or disturbance to a firm or an industry from factor lying outside it.
For example, a bus strike prevents the easy and correct entry of the workers into a
firm. Similarly, the rent of a firm increases very much if new economic units are established in the locality.
