In the context of urban economics, 'Agglomeration Economies' refer to:
A. The complete absence of any spatial effects
B. The costs of congestion only
C. Only the disadvantages of density
D. The productivity benefits that firms and workers derive from locating in close proximity to one another
Answer: Option D
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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