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AGGLOMERATION: The clustering of several similar or related activities at the same location. Many industries have firms that tend to agglomerate, that is, locate very close to one another, leading to geographic concentration. For example, the motion picture industry is concentrated in California, the fashion industry is concentrated in New York, and the petroleum industry is concentrated in Texas. Agglomeration can be caused by accessibility to a concentrated natural resource (such as petroleum or sunny weather), but if often feeds upon itself through agglomeration economies. Firms in the same industry often have lower production cost when the located near their competitors.
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ECONOMIES OF SCALE Declining long-run average cost that occurs as a firm increases all inputs and expands its scale of production. Economies of scale result from increasing returns to scale and are graphically illustrated by a negatively-sloped long-run average cost curve. Economies of scale usually occur for relatively small levels of production and are then overwhelmed by diseconomies of scale for relatively large production levels. Together, economies of scale and diseconomies of scale create a U-shaped long-run average cost curve.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time browsing about a thrift store trying to buy either a wall poster commemorating the first day of winter or blue cotton balls. Be on the lookout for strangers with large satchels of used undergarments.
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This isn't me! What am I?
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In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
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"Argue for your limitations, and sure enough, they're yours." -- Richard Bach
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ICC
International Chamber of Commerce
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