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- competition for inputs diseconomies
- congestion diseconomies

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- communication diseconomies
- motivation diseconomies
- management diseconomies
- flexibility diseconomies

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same proportional increase in productive factors give rise to decreasing additions to total output

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- concentration economies
- specialised labour economies
- knowledge economies

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reduction in AC as a result of using larger FOP

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As a firm grows in size it is able to move into other product areas and markets which reduces the risks associated with a decline in any one of them

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Large- scale firms usually have better and cheaper access to borrowed funds than smaller firms.
Because the perceived risk to the lender is lower

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Firms using technology can reduce the number of people they employ, so reduce  average cost.
Through applications of online ordering and booking system

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In large- scale firms are able to hire specialists and experts to manage operations, finance, HR, sales and so on.
Cost savings are expected to accrue where specialists are employed

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Large- scale firms are able to promote their products on television abd in newspapers at lower rate due to purchasing large s of air time and space.
Also, able to save costs of distribution because of the large volume of products being shipped

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As firm increase the scale, they increase their purchasing power with suppliers.
Eg. Bulk buying- purchase input more cheaply so reducing average cost.

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Reduction of LRAC- improvements & innovations in production process as the firm increases the scale of production

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Internal economies of scale: reductions in LRAC ad a result of the firm itself increasing the scale of production.

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Meaning: the benefits gained from falling long-run average costs as the scale of output increases