Figure 2: Profit and firm cluster size 16 18 19 20 Use Figure 2. Based on...

 

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Figure 2: Profit and firm cluster size 16 18 19 20 Use Figure 2. Based on this diagram it can be said that: I. The equilibrium cluster size of firms exceeds the efficient size II. In making a location decision, each individual firm ignores the external cost from agglomeration diseconomies III. Once we reach 20 firms in the cluster (i.e., the maximum size of this cluster), a new cluster will develop OI, II, and III I and III only I and II only Il only Figure 2: Profit and firm cluster size 16 18 19 20 Use Figure 2. Based on this diagram it can be said that: I. The equilibrium cluster size of firms exceeds the efficient size II. In making a location decision, each individual firm ignores the external cost from agglomeration diseconomies III. Once we reach 20 firms in the cluster (i.e., the maximum size of this cluster), a new cluster will develop OI, II, and III I and III only I and II only Il only

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Solution The correct answer is I and III only Explanation it is vital t... View the full answer