Question

What is Location theory?

Answer 1

Location theory has become an integral part of economic geography, regional science, and spatial economics. Location theory addresses questions of what economic activities are located where and why. Location theory or microeconomic theory generally assumes that agents act in their own self-interest.

Answer 2

Location theory is concerned with the geographic location of economic activity; it has become an integral part of economic geography, regional science, and spatial economics. Location theory addresses questions of what economic activities are located where and why. Location theory rests—like microeconomic theory generally—on the assumption that agents act in their own self-interest. Firms thus choose locations that maximize their profits and individuals choose locations that maximize their utility.

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