What are ‘agglomeration economies’?

1.	What are ‘agglomeration economies’?
Answer» The term agglomeration is an economic term used to refer to the phenomenon of firms being located close to one another. There are a number of components we'll explore later in this lesson, but for now just remember that agglomeration relates to clusters of population or business activity. Many industries tend to come together to make use of the advantages offered by the urban centres known as agglomeration economies. Gradually a large industrial agglomeration takes place. So, it is basically coordination of various industries in a city for the development of manufacturing industries.

Answer»

The term agglomeration is an economic term used to refer to the phenomenon of firms being located close to one another. There are a number of components we'll explore later in this lesson, but for now just remember that agglomeration relates to clusters of population or business activity.

Many industries tend to come together to make use of the advantages offered by the urban centres known as agglomeration economies. Gradually a large industrial agglomeration takes place. So, it is basically coordination of various industries in a city for the development of manufacturing industries.

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