Location economies are important because locating in an optimal location can:

Question

Quizplus · Accepted Answer

Location economies can lead to both cost savings and value creation. By locating in an optimal location, a firm can take advantage of lower costs of production (e.g. cheaper labor, materials, and energy) as well as benefit from the advantages of being close to suppliers, customers, transportation hubs, and other key resources. This can result in lower costs and better value proposition for customers, leading to competitive advantages and higher profitability. The answer is not D as competitors moving in is not a direct consequence of location economies, but rather a competitive response to market opportunities and challenges.

Location Economies Are Important Because Locating in an Optimal Location