The existence of external economies of scale
A)cannot be associated with a perfectly competitive industry.
B)tends to result in one huge monopoly.
C)focuses more on individual firms than the industry as a whole.
D)may be associated with a perfectly competitive industry.
E)tends to result in large profits for each firm.

Question

Quizplus · Accepted Answer

External economies of scale can occur in a perfectly competitive industry when the industry's expansion leads to cost advantages for all firms, such as through shared suppliers or improved infrastructure.

The Existence of External Economies of Scale