Answer to Question #205684 in Microeconomics for vtg

Question

Location theory has become an integral part of economic geography and spatial economics. It addresses questions of what economic activities are located where and why. Location theory basically assumes that firms and individuals act in their own self-interest as to maximize their profits and utility, respectively. •

Outline ANY THREE (3) technical factors that may be considered when making a decision on industrial location. •

Discuss the Market Area Theory (MAT) of Tord Polander.

Answer 1

Technical factors that may be considered when deciding on industrial location.

I) Raw materials

The location of an industrial enterprise is largely influenced by the availability or location of raw materials

II) power

Any industrial establishment needs access to either conventional or non-conventional power or both

III) Availability of labour

Both skilled and unskilled manpower is required for the success of any industry

Market area theory.

This theory attempts to explain the means by which settlements locate in reference to one another, the extent of the market area and why central places function as hamlets, villages, towns or cities.