Localization economies are cost savings that a firm achieves by
A) using local rather imported than labour.
B) clustering with other similar firms.
C) locating in rural areas.
D) locating in multiple areas.
E) avoiding globalization.

Question

Quizplus · Accepted Answer

Localization economies refer to the cost savings achieved by firms when they locate near other similar firms, also known as clustering. By doing so, the firms can share resources, infrastructure, and knowledge, which leads to reduced costs and increased efficiency. Using local labor (A) or locating in rural areas (C) may result in some cost savings but would not necessarily create localization economies. Locating in multiple areas (D) may increase the firm's reach but does not necessarily lead to cost savings through localization economies. Avoiding globalization (E) may not be a practical option for most firms and does not relate directly to localization economies.

Localization Economies Are Cost Savings That a Firm Achieves by