If substantial internal scale economies exist, production of a commodity tends to be concentrated in a few large facilities in a few countries.

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Substantial internal scale economies refer to cost advantages that large facilities have over smaller ones due to their size and production volume. This tends to lead to concentration of production in a few large facilities in a few countries, as they are able to produce at a lower cost than smaller competitors.

If Substantial Internal Scale Economies Exist, Production of a Commodity