Concept:The location of industries within an industrial area is mainly influenced by the benefits they gain from being clustered together, known as external economies.
Explanation:External economies are advantages that a firm enjoys due to the growth and concentration of the whole industry in a particular area.
These benefits lower the average cost of production for all firms in the area.
They arise from shared facilities like transport, communication, banking, and availability of skilled labour.
They also come from the presence of supporting and auxiliary industries, research centres, and workshops.
Such benefits encourage more industries to locate near each other in an industrial area.
Internal economies, on the other hand, are advantages a single firm gains from its own expansion.
Division of labour and nearness to financial institutions are not the primary locational factors.
Answer:B. external economies