Final answer:
When choosing a location for production facilities, firms consider factors such as labor costs, proximity to suppliers and customers, transportation quality, taxes, and government competence. Environmental protection costs are typically a small percentage of overall costs. Firms prioritize other location factors over skimping on environmental protection costs.
Step-by-step explanation:
When firms decide where to locate a new factory, they take into consideration several factors such as labor and financial capital costs, proximity to reliable suppliers and customers, quality of transportation and communication networks, taxes, and the competence and honesty of the local government. Although the cost of environmental regulations is a factor, it typically represents a small percentage of the overall costs compared to other factors. Firms prioritize these location factors over trying to save on environmental protection costs.