Internal Economies of Scale Means That

Multiple Choice

Internal economies of scale means that

A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs.
B) firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market.
C) consumers will have less choices once trade begins, because firms will be squeezed out of the market.
D) expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output.