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Internal economies of scale are firm-specific, or caused internally, while external economies of scale occur based on larger changes outside of the firm. Both types result in declining marginal costs of production; yet, the net effect is the same. External economies of scale are generally described as having an effect on the whole industry.
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Internal economies(reduction in cost of production by expanding scale of production) accrue to a particular firm like Managerial economies, Financial economies, Technological economies etc External economies are common to all the firms in an industry or all the firms in an area. For example: Economies of Localisation, Economies of Information.
Answer
Internal economies(reduction in cost of production by expanding scale of production) accrue to a particular firm like Managerial economies, Financial economies, Technological economies etc External economies are common to all the firms in an industry or all the firms in an area. For example: Economies of Localisation, Economies of Information.

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