URBANIZATION AND LOCALIZATION ECONOMIES
Urbanization economies is when an external scale economy occurs if the production cost of an individual firm decreases as the total output of the urban area increases. Urbanization economies differ from localization economies in 2 ways. First, urbanization economies result from the scale of the entire urban economy, not simply the scale of a particular industry like localization economies. Second, urbanization economies occur at the metropolitan level rather than the industry levels like localization economies, but they are similar to localization economies in the sense that they arise for the same reasons and that they are benefits of localization.