GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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External economies of scale can arise from
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Bulk purchases of raw materials, parts and components at favorable prices by a particular business/firm
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Purchase and use of physical/human capital by a particular business/firm
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Greater availability of skilled laborers for a particular industry in a particular area
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A business/firm being able to obtain lower interest rates on loans
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Explanation:
Detailed explanation-1: -Technical progress leads to development of machine at low price is example of external economies of scale.
Detailed explanation-2: -External economies of scale occur when cost per unit of output depends on the size of the industry. Internal economies of scale occur when the cost per unit of output depends on the size of a firm.
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