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WAEC Economics 1993 Question 9

Question 9

Industrialisation

An entrepreneur will locate his industry in a place

  1. A.nearest to his home town
  2. B.where the cost of production will be minimized
  3. C.nearest to his wife's hometown
  4. D.where the government directs him to locate it
  5. E.where there is no other industry.
Show the answer and explanation

Answer: B (where the cost of production will be minimized)

Explanation

A rational entrepreneur chooses the location where his costs of production (and distribution) are lowest.