Direction: Read the passage and answer questions that follow.

In the analysis of factors affecting demand and revenue, Smith confirmed to the deviation of total sales and revenue for a single firm at a given location. "But the volume of the demand cone and hence the total revenue obtainable can vary among possible locations in accordance with variations in any of the cost and demand conditions involved. In real world it is unlikely that population density, production costs, transport rates, demand functions and the like will remain fixed over anything other than a very smalll area.... . It is important to add to the general locational principles... . Changes in the variables affecting cost and revenue will bring about changes in the prevailing cost/revenue situation, and thus changes in the comparative economic advantage of alternative locations.