A small scale firm located within an industrial estate will enjoy
A small scale firm located within an industrial estate will enjoy
- A. government protection and funding
- B. technological economies of scale
- C. financial economies of scale
- D. external economies of scale
Correct Answer: D. external economies of scale
Explanation
A small scale firm located within an industrial estate will enjoy external economies of scale. This is because the firm will be able to benefit from the shared infrastructure and services that are available in the industrial estate.
External economies of scale are cost savings that are enjoyed by firms as a result of the growth of the industry as a whole. These savings can be realized through the sharing of infrastructure, such as roads, water, and electricity, and the pooling of resources, such as research and development.
In addition, the firm may also be able to benefit from the clustering of firms in the industrial estate. This clustering can lead to increased competition, which can drive down prices and improve the quality of products and services.