Weber's Least Cost Theory, developed by Alfred Weber, explains the optimal location for a manufacturing plant based on minimizing transportation and labor costs, and taking agglomeration into account. The theory emphasizes the importance of weight-losing and weight-gaining industries in determining the ideal location. Industries will seek locations where these costs are minimized to maximize profits. It's all about finding the sweet spot to keep costs down! π°
Match the term with the correct definition:
| Term | Definition |
|---|---|
| A. Agglomeration | 1. The increase in cost of transportation as distance increases. |
| B. Weight-Losing Industry | 2. The clustering of businesses in the same area to benefit from shared resources. |
| C. Weight-Gaining Industry | 3. An industry where the final product weighs more than the raw materials. |
| D. Transportation Costs | 4. Expenses incurred to move raw materials and finished goods. |
| E. Distance Decay | 5. An industry where the final product weighs less than the raw materials. |
(Answers: A-2, B-5, C-3, D-4, E-1)
Complete the following paragraph using the words: labor, transportation, Weber's, agglomeration, and costs.
__________ Least Cost Theory focuses on minimizing __________ and __________ __________. It also considers __________, which can attract industries to a specific location due to shared __________ and services.
(Answers: Weber's, transportation, labor, costs, agglomeration, costs)
Explain how changes in technology, such as improved transportation methods, might affect the applicability of Weber's Least Cost Theory in today's global economy. π
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