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Clustering _____ Select one: a. takes place when new firms enter regions already thick with other firms in the same or similar industries. b. occurs when there is a single firm in an economy that can charge different prices for the same product. c. occurs when government resources are diverted toward one particular sector of an economy.

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Answer:

Letter a is correct. Takes place when new firms enter regions already thick with other firms in the same or similar industries.

Explanation:

Clustering occurs when there is a communication and collaboration of certain companies with similar characteristics and located in the same region, which generates greater organizational efficiency between each one.

It was Michael Porter who defined the concept of Cluster, and set three central objectives for companies using this arrangement:

  1. Stimulating the creation of new companies,
  2. Enhancing innovation,
  3. Increasing the productivity of cluster companies.

The biggest benefits added to this business arrangement strategy are: cost reduction, technology diffusion, entry into new markets, new products, overcoming legal barriers and stimulating the economic and social development of the region where the companies are located.

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