Other things being equal,when fixed costs are substantial and minimum efficient scale of production is high,the arguments for concentrating production at a few choice locations are strong.

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When fixed costs are high, spreading production facilities over multiple locations may result in higher costs due to duplication of fixed costs. Additionally, having a few concentrated locations can lead to economies of scale, further reducing costs. Therefore, the arguments for concentration of production in such situations are strong.

Other Things Being Equal,when Fixed Costs Are Substantial and Minimum