When an industry expansion brings about additional specialization of resources, thus reducing production costs in that industry, we call this
A)returns from specialization.
B)external economies of scale.
C)the law of demand.
D)decreasing marginal costs.
E)the law of increasing returns.

Question

Quizplus · Accepted Answer

External economies of scale occur when an industry expansion leads to specialized resources and reduced production costs, benefiting all firms within that industry. This is different from internal economies of scale, which occur when individual firms become more efficient as they grow in size.

When an Industry Expansion Brings About Additional Specialization of Resources