There are several factors that might influence a firm to locate close to its inputs rather than closer to its market, including:
Access to raw materials: If a firm relies heavily on a particular raw material, it may be more efficient to locate close to the source of that material to minimize transportation costs and ensure a
steady supply.
Labor availability: If a firm requires a specific type of labor or skill set, it may choose to locate near a labor pool that possesses those skills, even if that means being farther from its market.
Transportation costs: Depending on the type of product being produced, transportation costs can be a significant factor in a firm's decision on where to locate. If the cost of shipping raw materials or finished products is high, it may be more efficient to locate closer to the source of inputs, even if that means being farther from the market.
Government incentives: In some cases, governments may offer incentives such as tax breaks or subsidies to firms that locate in certain areas, even if those areas are farther from the market.
Environmental regulations: If a firm produces goods that have a significant environmental impact, it may need to locate close to its inputs to minimize that impact, even if that means being farther from its market.
Overall, the decision of where to locate a firm depends on a complex set of factors, including those related to inputs, markets, and government policy. By carefully weighing these factors, firms can choose a location that maximizes their efficiency and profitability.