Which of the following is NOT an internal economy of scale?

• A. Technical
• B. Marketing
• C. Bank loans
• D. Congestion

Answer: (D)

Internal economies of scale come from efficiencies inside the firm as it increases output. For example, technical economies come from using more advanced machinery and specialized processes, which lowers average costs. Marketing economies arise when the firm spreads advertising and promotional costs over a larger quantity of output. Financial economies, like easier or cheaper bank financing, occur as a larger, more established firm can access loans at better terms.

Congestion is different. It reflects a cost that grows when resources like roads, facilities, or networks become crowded as the firm expands. This isn’t a saving or efficiency gained from scaling; it’s a drawback or external effect that can raise costs for the firm and others. So congestion is not an internal economy of scale.