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JAMB Economics 1988 Question 7

Question 7

Industrialisation

Developments outside a given firm which reduce the firm costs are called

  1. A.internal economies
  2. B.external economies
  3. C.external diseconomies
  4. D.optimum effects.
Show the answer and explanation

Answer: B (external economies)

Explanation

Cost savings that come from outside the firm, such as from the growth of the whole industry, are external economies.