Question

The availability of a pool of trained labor, as a form of external economies of scale, refers to:

A. The cost savings achieved through efficient production processes
B. The reduction in average costs achieved by producing a larger volume of goods
C. The benefits gained by an industry as a whole through access to a skilled and trained workforce
D. The advantages of specialized knowledge and skills within the organization

Answer 1

The availability of a trained labor pool is an example of external economies of scale, referring specifically to industry-wide benefits from a skilled workforce.

Step-by-step explanation:

The availability of a pool of trained labor, as a form of external economies of scale, refers to the benefits gained by an industry as a whole through access to a skilled and trained workforce. This advantage is not about the cost savings from producing a larger volume of goods or from more efficient production processes within an individual organization, but rather the cost benefits that accrue to firms in an industry thanks to a shared pool of skilled labor.

These external economies of scale can result in an industry cluster where businesses benefit from the availability of a large, versatile labor pool with specialized knowledge and skills, thus potentially lowering their costs related to training and recruitment, and enhancing overall productivity.