External economies accrue due to increasing returns to scale.

Explanation:
External economies refer to the benefits that a firm or industry receives as a result of the growth or expansion of the entire industry or economy in which it operates. These benefits arise from factors that are external to the individual firm, such as the presence of a skilled labor force, an efficient transportation network, or a well-developed infrastructure.

Increasing returns to scale occur when an increase in inputs leads to a more than proportional increase in outputs. In other words, as a firm or industry expands its production, it is able to achieve greater efficiency and lower average costs.

Factors contributing to external economies due to increasing returns to scale:

1. Specialization: As an industry grows, firms within that industry can specialize in specific tasks or activities, leading to increased efficiency. This specialization can result in the development of specialized suppliers, skilled labor, and advanced technology, all of which contribute to external economies.

2. Knowledge spillovers: When firms or individuals within an industry interact and share knowledge, innovative ideas and best practices can spread throughout the industry. This sharing of knowledge can lead to improvements in productivity and efficiency, benefiting all firms in the industry.

3. Infrastructure and support services: As an industry grows, there is often an increase in the availability and quality of infrastructure and support services such as transportation networks, communication systems, and access to financing. These improvements can reduce costs and increase efficiency for all firms in the industry.

4. Access to inputs: A growing industry may attract suppliers and providers of inputs, such as raw materials and components, leading to increased competition and lower input costs. This can benefit all firms in the industry by reducing production costs.

5. Economies of scale: As an industry grows, firms can take advantage of economies of scale by spreading their fixed costs over a larger output. This can result in lower average costs and increased efficiency.

Overall, external economies due to increasing returns to scale can lead to lower costs, increased efficiency, and improved competitiveness for firms within an industry. These benefits accrue to all firms in the industry, regardless of their size or individual production levels.