External economies of scale arise when the cost per unit
A) falls as the industry grows larger and rises as the average firm grows larger.
B) rises as the industry grows larger and falls as the average firm grows larger.
C) falls as the industry and the average firm grows larger.
D) remains constant over a broad range of output.
E) rises as the industry and the average firm grows larger.

Question

Quizplus · Accepted Answer

External economies of scale occur when the cost per unit decreases as the industry expands, benefiting all firms within the industry, regardless of the size of individual firms.

External Economies of Scale Arise When the Cost Per Unit