What are Agglomeration Benefits?
- Agglomeration benefits are the increase in productivity associated with production in places with a denser population, such as cities.
How Do I Remember It?
- Think of agglomeration benefits as the positive effects when businesses come together in the same area. It’s like a business neighborhood where companies enjoy advantages like shared resources and ideas, making them more successful.
Real World Example
- Silicon Valley in California is a classic example of agglomeration benefits. The concentration of tech companies in this region fosters collaboration, a skilled workforce, and a culture of innovation, providing mutual benefits that contribute to the success of individual companies and the tech industry.
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