As the tenant manager of a major shopping center, which centripetal force will motivate youto place the maiority of food outlet tenants together? aCumulative Causation Positive Locational Externalitieso b O c.Economies of Scale. Economies of AgglomerationOd e.None of the above is correct
Question
As the tenant manager of a major shopping center, which centripetal force will motivate youto place the maiority of food outlet tenants together? aCumulative Causation Positive Locational Externalitieso b O c.Economies of Scale. Economies of AgglomerationOd e.None of the above is correct
Solution 1
As the tenant manager of a major shopping center, placing the majority of food outlet tenants together would be motivated by:
b. Positive Locational Externalities
Here's why:
Positive locational externalities occur when the presence of one business has a positive impact on nearby businesses. In the context of a shopping center, placing food outlets together can create a "food court" effect, where the variety and concentration of food options attract more customers, benefiting all the food outlets. Customers who come for one food outlet might decide to try another, or a group of customers might choose the food court because it offers options to suit different tastes.
The other options (a, c, d) do not directly apply to this situation. Cumulative causation and economies of agglomeration refer to broader economic and geographic phenomena, while economies of scale refer to cost advantages from increasing the scale of production, not the placement of tenants.
Solution 2
The concept of placing similar businesses or businesses that complement each other together is known as agglomeration. In the context of a shopping center, placing food outlets together can create a 'food court' atmosphere, which can attract more customers and increase sales for all the food outlets. This is due to the positive locational externalities that occur when similar businesses are located near each other, such as increased customer traffic and shared marketing benefits.
Therefore, the correct answer is:
b. Positive Locational Externalities
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