1.

Explain the difference between internal and external economies?

Answer»
Internal Economies of ScaleExternal Economies of Scale
1. Expansion of the firm itself.1. Expansion of the industry.
2. Lower long run average cost.2. Benefits most all firms.
3. Efficiencies from larger scale production. 3. Agglomeration economies are important.
4. Range of economies (e.g.,) Technical and Financial.4. Helps to explain the rapid growth of many cities.



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