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The agglomeration-advantage is a distortion why a firm is not located at the minimum-transportcost location. Agglomeration gives an advantage to the firm because of two reasons: (1) a locational advantage, i.e. the fact that the firm can expand his production in an agglomerated area, and (2) an urbanisation advantage , i.e. the fact that when a firm is located in an agglomerated area she has more easy access to auxiliary goods needed for production, because auxiliary firms are often located in agglomerated areas.

Weber expects that distortion stemming from agglomeration do not occur often, because agglomerations are mostly located at minimun-transport cost locations.

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