Question

Organizations that process natural or basic resources as raw materials or other essential inputs to obtain their outputs will locate near their resources if one of the following conditions holds:_______.

a. high economies of scale exist for the product
b. the raw material can be shipped long distance before being processed
c. there is a large loss in size or weight during processing.
d. both a and c

Answer 1

Organizations will locate near their resources if both high economies of scale for the product and a large loss in size or weight during processing exist.

Step-by-step explanation:

The condition that holds for organizations to locate near their resources is both a and c. If there are high economies of scale for the product and if there is a large loss in size or weight during processing, organizations will choose to be near their resources.

This allows them to take advantage of the cost savings and efficiencies that come from being close to raw materials and reducing transportation costs.

An example of this is a factory that uses wood as a raw material and outputs furniture. The factory would locate near forests where wood is abundant to minimize transport costs and losses during processing.