Concept:External economies are cost advantages a firm gains from the growth of the whole industry in a specific location.
Explanation:These benefits arise when many firms in the same industry cluster together in one area.
Such clustering is called localisation of industry.
A firm then enjoys shared infrastructure, skilled labour, and specialised suppliers.
These advantages do not come from the firm's own internal decisions.
They also do not depend mainly on government policy or share transferability.
Therefore, external economies essentially result from the localisation of industry.
Answer:B. localisation of industry.