noun
a situation in which the cost of producing each unit of a good or service increases as a company grows larger and its production capacity expands
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The company experienced diseconomies of scale when its production costs increased as it expanded.
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When the business got bigger, it started spending more money than before due to diseconomies of scale.
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As the company grew, it started losing money because of diseconomies of scale.
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Like a balloon being inflated too much, the company faced diseconomies of scale as it expanded beyond its optimal size.