Explain one possible disadvantage to a firm of increasing its scale of output.

While increasing scale often leads to economies of scale (lower average costs), if a firm becomes too large, it can experience diseconomies of scale, where long-run average costs begin to rise. This can be due to: - **Communication problems:** In a large organisation, messages can be distorted or delayed as they pass through many layers of hierarchy. - **Coordination issues:** It becomes harder to coordinate the actions of thousands of employees across different locations. - **Low morale:** Workers in a large firm may feel alienated and unimportant, leading to lower productivity.