Which of the following would be considered true about an agglomeration economy?
A) Helps enhance proximity in knowledge exchange.
B) Helps firms understand the drivers and benefits of clustering for developing a strategy.
C) Helps overcome the market failure that can result when a new technology has the potential for important societal benefits.
D) Helps firms reap benefits by locating them in close geographical proximity to each other.

Question

Quizplus · Accepted Answer

An agglomeration economy refers to the benefits that firms can experience by locating in close proximity to each other. This can lead to cost savings through shared resources, improved access to suppliers and customers, and increased knowledge exchange. Therefore, the correct option is D. Option A is related to knowledge exchange but does not explicitly refer to agglomeration economies. Option B describes the benefits of clustering but does not refer to agglomeration economies either. Option C refers to market failure, which is not a defining characteristic of agglomeration economies.

Which of the Following Would Be Considered True About an Agglomeration