BUS 225 Reasons Companies Continue Producing in High Cost Towns Paper Metropolitan areas in the United States contain almost 80 percent of the nation’s pop

BUS 225 Reasons Companies Continue Producing in High Cost Towns Paper Metropolitan areas in the United States contain almost 80 percent of the nation’s population and nearly 85 percent of its jobs. This high degree of spatial concentration of people and jobs leads to congestion costs and higher housing costs. To offset these costs, workers must receive higher wages, and higher wages increase firms’ costs. So why do firms continue to produce in cities where the cost of doing business is so high? Economists offer three main explanations:

First, cities developed and grew because of some natural advantages, such as a port.
Second, as cities grew, the resulting concentration of people and jobs led to efficiency gains and cost savings for firms, creating agglomeration economies.
Third and finally, the presence of a talented and flexible labor force made it feasible for entrepreneurs to start new businesses. This third reason for the growth of cities is called sorting.

Write a 3- to 4-page essay justifying these three explanations. In your essay, consider the following:

Is each of these explanations valid? Why or why not?
Are there real-world examples you can research to provide evidence supporting or disagreeing with these three justifications?
What could this suggest for the future of global urban economies? Could things be changing with technological advances? (Think about remote work, the online market, etc.)

Your paper must include

A title page with the following:
Title of paper
Name
Course name and number
Instructor’s name
Date
An introduction and a conclusion paragraph.
A separate references page. You must use at least two scholarly, peer-reviewed, or credible sources, in addition to the course text. It is important that the paper is in proper APA format. Refer to the General APA Guidelines from Purdue Owl for more information.

When you are finished, upload your document for grading.

Review the rubric to ensure you understand how you will be evaluated on this assignment: Unit 2 Rubric