This is benefit that comes from when firm and people located near one another. it is economies or external economies of scale refer to the benefits.
If the firm , industry, institution etc works together then the cost of the firm can also reduce. they also help to accumulate information and flow of new and innovative ideas among firm.
EXAMPLES:-
Imagine there is one leading company and there are two competitor of the company . the both the competitor come together for compete with leading company so this is the economics of agglomeration.
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