External Economies of Scale
Cost advantages that arise from the growth of the whole industry or cluster of businesses in a region, benefiting all fi...
Real World
Silicon Valley became a hub where all tech firms — Apple, Google, Meta — benefit from the same pool of specialist software engineers, venture capital networks, and component suppliers, reducing costs for every company in the cluster regardless of size.
Exam Focus
Contrast external with internal economies of scale by emphasising that external benefits apply to all firms in the industry, not just large ones.
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