Question

Why is the 'least cost' known as decision making factor for ideal location of an industry?

Answer 1

Alfred Weber first introduced his famous theory of industrial location in 1909, in his book entitled, Uber den Standort der Industrien and its English translation was published in 1929 as The Location and Theory of Industries. His theory is known as ‘Least-Cost Location Theory’ or ‘Least-Cost Minimisation Approach’. The basic objective of the Weber’s theory is to find out the minimum cost location of an industry.

Answer 2

Least cost is the key factor that determines the location of an industry because Industry tends to be located at a place where factors of production are either available or can be arranged at low cost.