A decline in average costs caused by the expansion of a firm is a form of:
A) external economies of scale.
B) internal economies of scale.
C) expansionist economies of scale.
D) fixed economies of scale.
E) final economies of scale.

Question

Quizplus · Accepted Answer

Internal economies of scale refer to the cost advantages that a firm can achieve by increasing its scale of production, leading to a reduction in average costs. This occurs within the firm as a result of its own expansion activities.

A Decline in Average Costs Caused by the Expansion of a Firm