Size and Location of a Firm

Syllabus tag: KCSE | Business Studies | Form 3 | Topic 16 Size and Location of a Firm

Lesson objectives

By the end of this topic, you should be able to:

• Distinguish a firm from an industry.
• Explain what determines the goods a firm chooses to produce.
• Describe the measures used to determine the size of a firm.
• Explain the factors influencing location, and localisation and delocalisation.

Summary

A firm is a single business unit; an industry is all firms producing similar goods. A firm's size is measured by output, employees, capital, floor area, market share and sales, no one of which is reliable alone. Its location is decided by weight loss in production: firms whose raw materials lose weight locate near materials, those whose products gain weight locate near the market.