The growth of the motion picture industry in los angeles, the petrochemical industry in houston, and the software industry in silicon valley are all examples of how the growth of an industry within a city can create cost advantages for future growth. economists refer to this phenomenon as economic inefficiencies. industry economies of scale. locational monopoly. agglomeration economies.

industry economies of scale

Explanation:

industry economies of scale refers to a  situation when the production of a certain industry become more efficient compared to early years of formation.

This situation can be achieved when we concentrated a specific type of industry within the same region (for example, Hollywood is where the film industry is concentrated , silicon valley is where the software industry is allocated , etc)

When an industry is focused on one place like this, every other components that support the industry (such as professional labors in programming field, actress and raw materials to make movies) will most likely flock into this area. This will eliminate various costs that derived from time, distance, and other causes of inefficiencies.

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