Which of the following is NOT a reason for the absence of an industry in the rural areas?
Absence of financial institution
Restricted market
Inadequate power and water supply
Inadequate transportation
Presence of external economies
Correct answer is E
External economies of scale are business-enhancing factors that happen outside a company but within the same industry. It has to do with the availability of skilled labor, banking facilities, transportation, communication, etc within a company.
Option E is the correct option because rural areas lack most of the things that make up a company's external economies of scale.