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What type of industry results when external economies reduce production costs as output expands?

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Question

What type of industry results when external economies reduce production costs as output expands?

Options

  • Increasing cost industry

  • Constant-cost industry

  • Decreasing cost industry

  • Monopoly industry

MCQ
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Solution

Decreasing cost industry

Explanation: 

When external economies lower production costs as the industry grows, the industry is classified as a decreasing cost industry.

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