Diseconomies of Scale

    First off lets start off with economies of scale. Economies of scale is when a firm is able to decrease the cost of each unit produced while still increasing their output of the product. This means that their MC decrease while output increases. This can happen when say a product that used to be "homemade" gets moved to a factory where they can mass produce that product. Just like people in the industrial era realized, you can reduce costs while increasing output by doing this.
    On the other hand, you have diseconomies of scale. Diseconomies of scale is basically the opposite of economies of scale, where the cost of each unit produced increase while their output increases. In this case, MC increase while output increases. Something like this can happen in something like the previous example, where instead of moving from a home to a factory, the factory owners try to fit too many workers inside of the factory to try to increase produce. But, instead of increasing production, the workers start to get in each other's way, thus the factory starts to have to hire more workers to get the same increase in production that he did before, increasing MC.

    An example of diseconomies of scale is in mining. The mining industry tried to outputs in response to rising prices, but instead, they caused a diseconomy of scale. In order to try to increase their output, the mining industry tried to increase the size of their mines. However, in order to increase in size, they also needed to upgrade their existing structures. This upgrade in structures actually made them more complex, making it harder to use for their existing employees and decreasing the efficiency of the mine.