Positive externalities that can cause firms in an industry to locate in the same area include:
A)industry-friendly environmental and labor policies.
B)favorable tax rates and economic incentives.
C)exchange of ideas and shared labor pools.
D)closeness to markets and low cost power supplies.

Question

Quizplus · Accepted Answer

Positive externalities refer to benefits enjoyed by firms due to the actions of others. In this case, firms in the same industry located in the same area benefit from the exchange of ideas and shared labor pools, which can lead to greater innovation and efficiency in the industry. The other options, such as industry-friendly policies, favorable tax rates, and low cost power supplies, may also be beneficial but are not necessarily specific to firms in the same area.

Positive Externalities That Can Cause Firms in an Industry to Locate