Describe how an accounting firm could experience diseconomies of scale.

Problems with coordination can cause diseconomies of scale. Suppose the firm hires so many new workers that management is unable to monitor the number of tax returns they can produce (output). Suppose the additional employees are not as productive as the previous employees; perhaps they spend too much time chatting with each other or checking their email and Facebook pages. As the firm expands, output increases but at a decreasing rate. At some point, long-run average total costs can increase.