When long-run average costs decrease as a result of industry growth, there are
A) internal economies.
B) internal diseconomies.
C) external economies.
D) external diseconomies.

Question

Quizplus · Accepted Answer

When long-run average costs decrease as a result of industry growth, it is due to external economies. These are benefits that all firms in the industry can enjoy as the industry grows larger, such as improved infrastructure or a larger pool of skilled labor, rather than improvements within a single firm.

When Long-Run Average Costs Decrease as a Result of Industry