External Economies Of Scale

Question 1

Specialist firms and infrastructure

Answer 1

In areas where an industry is located, specialist firms tend to locate too. These firms may be suppliers or may specialise in distribution. Firms of all sizes will have access to these specialist firms. Local infrastructure might be adapted to suit the needs of firms within industries that dominate that locality.

Question 2

Training and education

Answer 2

Local collages and universities will offer courses suited to the local community, thus helping all firms involved in the main industries in that area.

Question 3

Reputation

Answer 3

Sometimes a city or area gains an excellent reputation for the provision of a certain good or service. This can greatly assist firms that are located in that city or area, as they can use its reputation to boost sales of their goods.