Economics of scale.
Economics of scale are the cost advantages that enterprises obtain because of various facilities established due to basic industries in certain region. Sometimes due to advantage of many favourable factors for industrial development in certain areas, there is concentration of industries in that area, which is called agglomeration of industries in these regions industries develop not due to any locational factors but due to economies of scale enjoyed because agglomeration of industries. Due to the development of basic industries other ancillary industries which are complementary to each other also develop. For example, once cotton textile industry develops in any region, readymade garment making industries, industries supplying dyes and chemicals, industries producing materials like thread, buttons, laces, etc., also develop. Due to such agglomeration, the industries in that region get more profit compared to their investment due to economies of scale such as cheap transport, labour, financial facilities etc. For example, transport companies give concession, hence, the cost of transportation decreases. Since industries in this region are complementary, it is easier to collect or supply goods from other industries of nearby areas. For example, dye making industries supply dyes to cotton textile industry and cotton textile industry supplies cloth to ready-made garment industries.