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JAMB Economics 1995 Question 10

Question 10

Theory of Production

The advantages which firms obtain directly from expanding their operations are referred to as

  1. A.internal economies of scale
  2. B.external economies of scale
  3. C.economies of localization
  4. D.economies of resource allocation.
Show the answer and explanation

Answer: A (internal economies of scale)

Explanation

Internal economies of scale are cost savings a firm gets from its own growth, such as bulk buying or better machines.