Differnce between internal and external economies of scale
Internal economies of scale refer to the cost advantages that a firm can achieve by increasing its scale of production, such as reducing average costs through efficient use of resources, specialized machinery, or skilled labor. These economies are specific to individual firms and result from factors within the organization.
On the other hand, external economies of scale refer to the cost advantages that a firm can achieve as a result of the growth of an industry or a sector as a whole. These economies result from factors external to the firm, such as improved infrastructure, availability of skilled labor, or access to a larger market.
In summary, internal economies of scale are specific to the firm's operations and result from factors within the organization, while external economies of scale are industry-wide benefits that result from external factors such as improvements in infrastructure or access to a larger market.