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 the 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. Thus firms choose locations that maximize their profits and individuals choose locations that maximize their utility.
Read more about Location Theory: Origins, Other Uses
Famous quotes containing the word theory:
“Freud was a hero. He descended to the “Underworld” and met there stark terrors. He carried with him his theory as a Medusa’s head which turned these terrors to stone.”
—R.D. (Ronald David)