Question

What are the internal and external economics of scale of production?

Answer 1

Internal economies of scale are firm-specific, or caused internally, while external economies of scale occur based on larger changes outside of the firm. ... Marshall suggested broad declines in the factors ofproduction, such as land, labor and effective capital, represented a positive externality for all firms.

Answer 2

Answer:

There are two types of economies of scale: internal and external economies of scale. Internal economies of scale are firm-specific—or caused internally—while external economies of scale occur based on larger changes outside the firm. Both result in declining marginal costs of production, yet the net effect is the same.