Question

__ is not due to external economies of scale

Answer 1

The correct answer is:- Discount on purchases of raw materials.

The correct sentence is:-

Discount on purchases of raw materials is not due to external economies of scale.

• Here, in the given sentence, it has been asked that external economics are scale are not due to the discounts or offers that are prevalent on the purchase of raw materials.
• In the given sentence, it has been instructed to mention a factor that is not responsible for the external economies of scale.
• External economies of scale mean the factors that are responsible for increasing or expansion of the company in other geographical places.
• It has pros as well as cons. The example that we have given is not an adding factor to the external economies of scale.
• Hence, it is the right answer.

Answer 2

The increase in demand is not due to external economies of scale.

• External economies of scale mean those factors that affect the business in a positive way which are the external factors outside a company but within the same industry.
• For example when is technological progress the intern industry has a common benefit.
• The fixed cost is the long-run average cost of the company that may go down because of these factors.
• The demand for a particular product increases when the price of the product decreases.