The correct answer is: B. Internal and external
Economies of scale are cost advantages that a company gains due to increased production. These advantages can be divided into two types: internal and external.
Internal economies of scale are cost advantages that a company gains by increasing the scale of its production within a single plant or facility. These advantages can be achieved through a number of factors, such as specialization, division of labor, and learning by doing.
External economies of scale are cost advantages that a company gains by increasing the scale of its production in an entire industry. These advantages can be achieved through a number of factors, such as the availability of specialized suppliers, the development of infrastructure, and the growth of a skilled workforce.
The other options are incorrect because they do not accurately reflect the two types of economies of scale.
- Temporary economies of scale are not a real type of economy of scale. They are simply the benefits that a company gains from increasing production in the short run, before it has had time to fully adjust its costs.
- Managerial and industrial economies of scale are not accurate descriptions of the two types of economies of scale. Managerial economies of scale are cost advantages that a company gains by having a large and experienced management team. Industrial economies of scale are cost advantages that a company gains by being part of a large and successful industry.
- Natural and artificial economies of scale are not accurate descriptions of the two types of economies of scale. Natural economies of scale are cost advantages that a company gains due to the nature of its production process. Artificial economies of scale are cost advantages that a company gains due to government intervention.