External economies of scale often arise because similar firms
A) locate in the same geographic region.
B) collude to fix prices and increase profits.
C) have excellent internal logistics.
D) agree to cooperate to expand global trade.
E) have economies of scale in production.

Question

Quizplus · Accepted Answer

External economies of scale occur when firms in the same industry or related industries locate in the same geographic region. This can lead to benefits such as shared infrastructure or specialized labor pools that are not available outside of the region, resulting in cost savings and increased productivity for all firms involved.

External Economies of Scale Often Arise Because Similar Firms