passwella.
Menu

JAMB Economics 1992 Question 29

Question 29

Industrialisation

Firms are often set up close to each other in order to take advantage of

  1. A.supply of skilled labour
  2. B.agglomeration economies
  3. C.internal economies of scale
  4. D.external economies of scale
Show the answer and explanation

Answer: D (external economies of scale)

Explanation

When firms cluster they share services such as skilled labour, suppliers and infrastructure; these benefits from outside the firm are external economies of scale.