Explain How Diseconomies of Scale Can Affect Systems Development

question 74

Essay

Explain how diseconomies of scale can affect systems development.

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Definitions:

Deadweight Loss

The total loss of producer and consumer surplus from underproduction or overproduction.

Underproduction

A situation where the quantity produced of a good or service is less than the socially optimal level, often leading to market failure.

Market Price

The existing cost for acquiring or offloading an asset or service in the marketplace.

Consumer Surplus

The difference between the maximum price consumers are willing to pay and the actual price they pay.