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internal economies of scale occur when the average costs part 2 a. rise for a given firm as the industry grows larger. b. rise as the representative firm grows larger. c. fall as the representative firm grows larger. d. fall for a given firm as the industry grows larger.



Answer :

Internal economies of scale happen when a firm's average costs decrease as the industry as a whole expands.

What makes economies of scale crucial?

Increased profits - Economies of scale produce larger profits, which in turn boost returns on capital and give enterprises a platform to expand. Greater business scale - As a company expands, it becomes more stable and less prone to external challenges, such as hostile takeover offers.

What transpires in scale economies?

When an item or service can be produced in greater quantities with (on average) lower input costs, economies of scale arise. It is also possible to achieve external economies of scale, when a single industry gains from a change like better infrastructure.

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