Which of the following statements is true regarding location economies?
A)The demand and supply factors heavily influence the productivity of a location.
B)They apply only to service providers.
C)Each production activity generates more value in a particular location than elsewhere.
D)They are restricted to business activities that involve product manufacturing.

Question

Quizplus · Accepted Answer

Location economies refer to the benefits that firms can gain by locating different stages of their production process in different countries or regions. Each production activity generates different value in different locations due to factors such as labor costs, transportation costs, raw material availability, and government policies. Therefore, producing in a location where a specific production activity generates more value can result in cost savings and increased productivity. This concept is not restricted to a particular type of business activity and can apply to both manufacturing and service industries.

Which of the Following Statements Is True Regarding Location Economies