Question

Silicon Valley in Northern California is famous as the home to many businesses that produce high-tech products or serve high-tech companies.
This demonstrates the principle of:

A. outsourcing
B. post-Fordism
C. market dependence
D. back-office processing
E. agglomeration economies

Answer 1

Answer:

E) agglomeration economies

Explanation:

Agglomeration economies refers to a lot of companies being located close to one another. Generally most of these companies work on the same industry, e.g. Detroit for car manufacturers.

The main advantage of agglomeration economies is that synergy may be created between different firms which allows them to be more efficient and productive, and at the same time they will lower their costs.