Industries are sometimes located in areas which are not profitable so as to

Step 1: Analyze the question The question asks why a firm or government would place an industry in an area that is not profitable. Normal profit-driven location decisions favor places with good infrastructure, markets, and raw materials. So choosing an unprofitable site must be for a non-commercial, usually government-driven, reason.

Step 2: Explain the concept This is the idea of industrial location and balanced regional development. Governments often site industries (such as a steel complex, a refinery, or an agro-processing plant) in less-developed areas even when profits are low. The goal is to:

• create jobs in that area,
• build infrastructure like roads, electricity, and water,
• reduce overcrowding in big cities,
• spread development evenly across regions.

Step 3: Evaluate the options

• A. Encourage rural-urban migration: Wrong. Placing industries in rural areas reduces migration to cities, not encourages it.
• B. Be able to even-out development: Correct. This is the main reason for locating industries in less-developed areas, so that all regions benefit.
• C. Bring about external economies of scale: Wrong. External economies come from industries clustering together in an already developed area, which is usually the profitable place.
• D. Reap internal economies of scale: Wrong. Internal economies depend on the firm's own size and output, not on where it is located.

Step 4: Answer

Tip: When a question says an industry is located in an unprofitable area, think of government policy: balanced regional development, job creation, and reducing rural-urban drift. Profit-driven reasons like economies of scale point to clustering in developed areas instead.