Weber's Least Cost Theory



-The least cost theory defines 3 categories to lower cost in factories, the 3 categories are:

Transportation- Weber says that the place where transportation cost is least expensive is the same place that the owners will save the most money transporting raw materials to produce then sell.

Labor- A factories profit may increase farther from raw materials because the cheap labor helps make up for the added transports.

Agglomeration- The more Industries in an area will cause bigger profit because they can help each other.


bulk-reducing, locate factories closer to raw materials because the raw materials are heavier&bulkier, so they move closer to the raw materials because it cost less

bulk-gaining-moving closer to market because goods get heavier after it is the final product so being closer to the market cost less


2 examples of bulk-reducing

-copper and gold

- they are examples because both are much heavier before being made into a final product, so being closer to the raw materials, it will cost lest to transport them


2 examples of bulk-gaining

-Beverage products and Fabricated Metals

- These are examples of bulk-gaining because weight is added to the product. These factories are located closer to the market because it is cheaper to go a small distance with such a heavy product, lowering the cost.