Explain the importance ot transportation at the global, national, and local leve

Question

Explain the importance ot transportation at the global, national, and local levels. Explain what is meant when we say that transportation has a derived or dependent demand. Discuss the 7 reasons people desire transport. Explain Weber's theory of industrial location and the variations related to weight gain or loss in production. Based on this would International Paper prefer to locate a factory near sources of inputs (forests) or near their markets? Explain what happens to market area and output as transport costs are reduced. Why does this happen? 1. 2. 3. 4.

Explanation / Answer

1. The importance of transportation at global level:

The importance of transportation at national level:

The importance of transportation at local level:

2. Transportation is considered as a derived demand because a user demands a transport to fulfill his wish or need to access other services or products.

7 reasons why people desire transport:

3. Weber’s theory of industrial location states that an industry is usually located at a place where the transportation cost of inputs to the industry i.e. raw materials and the transportation costs of outputs i.e. final products is minimum.

Transportation costs depend on the nature of terrain as well as the connectivity and accessibility of the region. As the markets will be quite easily feasible, having better terrain and better connectivity, the factory will be located near the markets.

4. If the market area and outputs of business decrease, the feasibility of doing transportation decreases as the cost incurred in traversing the route will become quite costly.

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