Other things being equal, when fixed costs are substantial and minimum

QUESTION

Other things being equal, when fixed costs are substantial and minimum efficient scale of production is high, the arguments for concentrating production at a few choice locations are strong.

Indicate whether the statement is true or false.

ANSWER

TRUE
A number of technological factors support the economic arguments for concentrating production facilities in a few choice locations or even in a single location. Other things being equal, when fixed costs are substantial, the minimum efficient scale of production is high, and/or flexible manufacturing technologies are available, the arguments for concentrating production at a few choice locations are strong