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When the output rate is increased but the average unit costs also increase, then we can say that we are experiencing Diseconomies of scale.
The diseconomies of scale usually happen because more inputs are produced at the same time more outputs are produced. This concept follows the theory of decreasing marginal returns since an increase in inputs produces an increase in output.
It is caused due to communication breakdown, lack of motivation, coordination, and focus by the organization on its employees. It may result from technical issues in a production process, organizational management issues, or resource constraints on productive inputs.
Sometimes, diseconomies of scale occur within an organization when a company's plant cannot produce the same quantity of output as another plant. They mainly occur when the management of the workforce in an organization becomes unmanageable.
To know more about Diseconomies of scale,
brainly.com/question/29238709
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