When there are external economies of scale,an increase in the size of the market will
A)decrease the number of firms and lower the price per unit.
B)increase the number of firms and lower the price per unit.
C)increase the number of firms and raise the price per unit.
D)not affect the number of firms,but will lower the price per unit.
E)decrease the number of firms and raise the price per unit.

Question

Quizplus · Accepted Answer

External economies of scale mean that as the industry grows, costs per unit decrease, encouraging more firms to enter the market and leading to lower prices.

When There Are External Economies of Scale,an Increase in the Size