In the context of urban economics, 'Agglomeration Economies' refer to:
A. Only the disadvantages of density
B. The costs of congestion only
C. The productivity benefits that firms and workers derive from locating in close proximity to one another
D. The complete absence of any spatial effects
Answer: Option C
Solution (By JKSSB Mock Tests)
Agglomeration economies are the benefits—knowledge spillovers, labour-market pooling, input sharing—that arise when economic activity is concentrated in space, helping to explain the existence and growth of cities.
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