External economies of scaleA. lead to the creation of a single large monopoly. B. cannot be associated with a perfectly competitive industry. C. tend to result in large profits for each firm and an industry with relatively few firms. D. are more likely to be associated with a perfectly competitive industry.

Question

Evie Sexton

Business

11 September, 12:57

External economies of scaleA. lead to the creation of a single large monopoly. B. cannot be associated with a perfectly competitive industry. C. tend to result in large profits for each firm and an industry with relatively few firms. D. are more likely to be associated with a perfectly competitive industry.

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Warner · Answer 1

The correct answer is option D.

Explanation:

External economies of scale can be defined as the situation when the average cost of production is reduced due to growth of industry as a whole. It can also be referred as the external benefit of expansion of the industry.

It is generally associated with a perfectly competitive industry. While internal economies of scale is generally associated with imperfectly competitive markets.