Question 39
Theory of ProductionThe benefit a new firm enjoys by tapping power from an existing electric pole because it is in the same area with other firms is a form of
- A.risk-bearing economies of scale
- B.external economies of scale
- C.technical economies of scale
- D.financial economies of scale
Show the answer and explanation
Answer: B (external economies of scale)
Explanation
Benefits from facilities shared with other firms in an area are external economies.