The EzyEducation website uses cookies to help ensure we give you the best experience.
If you continue without changing your settings, we assume that you are happy to receive all cookies on the EzyEducation website.
Please refer to our Privacy and Cookies Statement to

find out more.

Continue

External Economies of Scale

Decreasing average costs due to the positive externalities of an industry or economy growing in size.

Below shows the effects of this type of economies of scale on a firm's long-run average cost curve. For instance the development of infrastructure or the benefits of an expanded local supply network may lead to lower average costs.

Forgot your password?