"External economies" derive from all of the following except
A) the joint use of transportation facilities.
B) labor force concentrations in urban areas.
C) social overhead facilities such as police and fire protection.
D) economies of management associated with large firms.

Question

Quizplus · Accepted Answer

External economies are benefits that are shared by firms in a particular industry or geographic area. Option D - economies of management associated with large firms - refers to internal economies of scale, which are benefits enjoyed by individual firms as they increase in size and output, rather than external economies. Options A, B, and C are all examples of external economies, as they represent benefits that are shared by multiple firms in a particular location or industry.

"External Economies" Derive from All of the Following Except