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

Question

Quizplus · Accepted Answer

External economies of scale occur when a company benefits from the overall growth of the industry, leading to a decrease in average costs not tied directly to its own scale of production.

A Decline in Average Costs Caused by the Expansion of an Industry