Marshall introduced the idea of ‘internal’ economies, which accompany the growth of the ‘individual representative firm’, as opposed to the ‘external’ economies accompanying the growth of ‘a national or a local industry’. In principle the pursuit of internal economies would lead to a world composed of firms each one producing a great share of a very small range of commodities. But while Marshall shared the classical view of an increasing average size of the business unit, he put it into a dynamical and historical context. Tendencies and countertendencies may result in different outcomes in terms of market structures.
KeywordsConcentration External economies Internal economies Market structure Marshall, A. Mechanization
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