External economies of scale occur because:
A) the firm becomes large and so gains the advantages of international trade
B) the firm becomes larger and its industry becomes larger
C) the industry becomes larger
D) the firm becomes large and is able to obtain favourable terms from suppliers

Question

Quizplus · Accepted Answer

External economies of scale occur when the cost per unit of output decreases as the size of the entire industry grows, benefiting all firms within the industry, not just a single firm.

External Economies of Scale Occur Because