The concentration of firms in one area is referred to as of ……………. industries.

Step 1: Analyze the question The question asks for the term used when many firms of the same type cluster in one geographical area. Think of examples in Nigeria: the textile firms in Kano, the cocoa-processing industries in the Southwest, or the Aba cluster for leather and shoe-making.

Step 2: Explain the concept In Economics (Production and Industrial Location), localization of industries means the concentration of firms in the same industry in a particular area or region.

Firms cluster together because of advantages such as:

• Availability of raw materials
• Skilled labour already in the area
• Good transport and infrastructure
• Ready market
• External economies of scale, where supporting industries, banks and suppliers grow around them

Step 3: Check each option

• A. Location: This refers to the place where a single firm is sited. It does not mean concentration of many firms, and the phrase "of ... industries" does not fit it.
• B. Localization: Correct. It is the standard term for concentration of an industry in one area, and the phrase "localization of industries" is the textbook wording.
• C. Multiplication: This is not an economic term for industrial concentration.
• D. Proliferation: This means rapid spread or increase in number, not concentration in one place.
• E. Pluralization: This is a grammar term, not relevant here.

Step 4: Answer The correct answer is B. localization.

Exam tip: Remember "Localization = Local clustering." The word "local" tells you the firms are packed into one locality. Don't confuse it with dispersal (spreading firms across different areas), which is the opposite.