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Question

External Economies and Diseconomies arise due to _____________________.

A
Overall industry-level changes
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B
Changes at the Firm level
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C
Both (a) and (b)
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D
Neither (a) nor (b)
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Solution

The correct option is A Overall industry-level changes
External Economies and Diseconomies arise due to overall industry-level changes. External economies and diseconomies can be defined as a situation that gets affected by the external factors of the business environment outside the firm.
Hence, option A is correct.

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