13. External Economies of Scale and the International Location of Production (Ch. 7) In discussions of labor market pooling the advantage of having multiple firms in one location is pointed out. Take the case of two firms in one location. If one firm is expanding while the other is contracting, it is to the advantage of both the workers and the firms that they be able to draw from the same labor pool. But what if both firms are expanding, or both firms are contracting, at the same time. Does that 4 Obligatory Homework Set constitute an argument against geographical concentration? (Here it is helpful to use the numerical example in the textbook sub-section "Labor market pooling" on page 183, and think through that example carefully, when answering the question.)