GCEGeographyEconomic Activities2023

In economic geography, the term 'agglomeration economies' refers to

Athe financial losses suffered when industries are too widely dispersed
Bcost savings and benefits that firms gain from locating close to each otherCORRECT
Cgovernment grants given to industries in rural areas
Dthe merging of small farms into large agricultural estates
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Why the answer is B, and why the others tempt you.
Agglomeration economies are the advantages (cost savings, shared infrastructure, skilled labour pools, and supplier networks) that firms obtain by clustering together in the same location. This concept explains why industries tend to concentrate in urban centres or industrial zones. The other options describe unrelated economic concepts.
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