AQA A-Level Economics Paper 1 June 2024

External economies of scale occur when all firms in an industry are able to benefit from lower long-run average costs. For example, if the government announced a scheme which encouraged more people to

When firms become larger and larger, they are impacted by both economies of scale and diseconomies of scale at the same time. After a point, diseconomies of scale will outweigh economies of scale.

Large firms are able to benefit from economies of scale. This is when long-run average costs fall as output increases. Risk-bearing, financial, marketing, technical, managerial, and purchasing are the main types of economies