External economies of scale when the cost per unit depends on the size of the industry but not on the size of any one firm.

Define Increasing Return To Scale (Economies of Scale) This means that when inputs to an industry increase at a certain rate, output increases at a faster rate.

External economies of scale occur when cost per unit of output depends on the size of the industry.

The presence of economies of scale may be seen from the fact that doubling the input of labor from 15 to 30 more than doubles the industry's output.

When economies of scale apply at the level of the industry rather than at the level of the individual firm, they are called external economies.

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