in an industrial area, the location of industries is particularly influenced by ?

Analyze the question: It asks what mainly influences where industries locate within an industrial area. This points to the concentration (localization) of industries in one place.

Explain the concept:

• Internal economies of scale are cost savings that arise within a single firm as it grows, such as bulk buying or better machinery. They affect the size of the firm, not where industries choose to locate.
• External economies of scale are cost savings that arise outside the firm, from the growth of the industry or area as a whole. They include: • A pool of skilled labour • Good roads, power supply and water • Ancillary and supporting industries (suppliers, repairers, transporters) • Banking, insurance and marketing services • A shared market for the product

These benefits attract many firms to the same area. That is why we see clusters like Ikeja and Agbara (Lagos/Ogun), Aba (leather and garments), and Nnewi (auto parts).

Step-by-step solution:

1. Option A, division of labour: this concerns how production tasks are organised. It is limited by the extent of the market and does not determine location.
2. Option C, internal economies: these benefit only the individual firm and do not explain why industries cluster together.
3. Option D, nearness to financial institutions: this is one possible factor. But it is only one example of an external economy, and it is too narrow to be the general answer.
4. Option B, external economies: these are the shared advantages of an industrial area (infrastructure, labour pool, supporting services). They are the main reason industries locate together.

Correct answer: B. External economies

Exam tip: When a question asks about location or concentration of industries, think external economies. When it asks about a firm's size or growth, think internal economies. Remember: "External = the Environment around the firm."