Agglomeration economies

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Updated: Aug 20, 2021

The external economies of scale available to individuals or firms in large concentrations of population and economic activity. These arise because larger markets allow wider choice and a greater range of specialist services. Agglomeration economies are believed to explain the tendency of conurbations to contain an increasing share of the population of many countries.

Reference: Oxford Press Dictonary of Economics, 5th edt.



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