External economies of scale

External economies of scale:

Whenever many firms expand in a particular region that is, whenever the industry grows – they enjoy a number of benefits that are termed as external economies of scale. This is not the benefit enjoyed by a single firm however by all firms in the industry due to the structural growth. They are:

a) Increased transport facilities

b) Banking facilities

c) Development of townships

d) Information and communication development

All such facilities are obtainable to all firms in an industrial area.

 

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