Final answer:
When a plant increases in size in the long run, it can experience diseconomies of scale, meaning the average total cost of production rises due to management inefficiencies and communication problems.
Step-by-step explanation:
In the long run, with an increase in the plant size, there is a situation termed diseconomies of scale. This phenomenon occurs when, as the level of output and plant scale rises, the average total cost of production also increases. Beyond a certain point, the complexity of managing a very large plant leads to inefficiencies. Multiple management layers result in communication challenges with workers, which, in turn, disrupt the flow of work and materials. While overly large factories are rare due to competitive disadvantages against smaller, more cost-efficient plants, there have been historical exceptions.
Notably, in planned economies like the old Soviet Union, massive, inefficient plants could survive due to protection from competition by government planners. However, typically, as firms grow beyond a certain size, cost increases make them uncompetitive, and this is reflected in the upward-sweeping right-hand portion of the long-run average cost curve.