As industry output increases,suppose that new knowledge about production technology spreads among firms in the area through direct contacts among firms or as workers transfer from firm to firm.This would be an example of
A) internal economy of scale
B) external economy of scale
C) internal diseconomy of scale
D) external diseconomy of scale

Question

Quizplus · Accepted Answer

The spread of new knowledge about production technology among firms in the area through direct contacts or as workers transfer from firm to firm is an example of external economies of scale. This is because the improvement in technology benefits all firms in the area, leading to increased productivity and efficiency.

As Industry Output Increases,suppose That New Knowledge About Production Technology