External economies are

  • A The advantage accuring to a firm as a result of its expansion
  • B The advantages accuring to one firm as a result of the existence of other firms in the same locality
  • C Benefits derived by a firm as a result of its own individual policy
  • D Reaped only by agricultural firms
  • E Bound to increase the costs of production whatever the circumstances

The correct answer is B. The advantages accuring to one firm as a result of the existence of other firms in the same locality

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