External Economies

Business, Legal & Accounting Glossary

Definition: External Economies

Full Definition of External Economies

External Economies refer to the changing circumstances outside of an individual firm, but within a certain industry. The typical way this term is used is to refer to lowered costs because of increased industry output. External diseconomies refers to the opposite. For example, when an industry grows quickly the labor force which is trained in that industry remains fixed in the short run, so the resulting higher cost of labor would be an external diseconomy.

Firm internalities are changes within one firm. Firm externalities are within the same industry but are beyond the scope of an individual firm.

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Modern Language Association (MLA):
External Economies. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 22, 2021 https://payrollheaven.com/define/external-economies/.
Chicago Manual of Style (CMS):
External Economies. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/external-economies/ (accessed: September 22, 2021).
American Psychological Association (APA):
External Economies. PayrollHeaven.com. Retrieved September 22, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/external-economies/

Definition Sources

Definitions for External Economies are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th August, 2021 | 0 Views.