Principles of Microeconomics / Unit 6 MIC 0537 short lesson, about 20 seconds
Diminishing Returns Are Not Diseconomies
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The idea
Diminishing returns happen in the short run as one input rises against a fixed one; diseconomies of scale happen in the long run as every input rises together.
In practice
Crowding one oven is the first; a sprawling chain losing control, the second.
Where people slip
A firm can have diseconomies without diminishing returns, and the reverse; never explain one by the other.
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