Question

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.

Answer 1

Answer:

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.