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7.5.6 internal and external economies of scale

Why does a firm's LRAC fall as it expands its own output?

A

Constant returns to scale lower a firm's LRAC when it expands its own output.

B

Internal economies of scale lower a firm's LRAC when it expands its own output.

C

Diseconomies of scale lower a firm's LRAC when it expands its own output.

D

External economies of scale lower a firm's LRAC when the whole industry expands.

7.5.6 internal and external economies of scale Flashcards

  1. Intl A Level
  2. /Economics
  3. /7.5.6 internal and external economies of scale

28 flashcards on CIE Intl A Level Economics 7.5.6 internal and external economies of scale: the key terms and definitions you need to recall.