Economics • Economic BasicsMedium

In the context of the mountainous economy of Himachal Pradesh, how does difficult topographical terrain primarily impact the cost structure of infrastructural development and goods supply?

A. It drastically reduces transportation and logistics costs due to shorter aerial routes.

B. It increases transportation and freight costs due to challenging gradient curves and sparse connectivity.✓ Correct Answer

C. It eliminates the need for any public capital expenditure.

D. It ensures uniform distribution of goods at zero marginal cost.

💡 Solution & Explanation

Rugged topography and winding mountain roads increase freight expenses, vehicle wear, and transit times, elevating the overall cost of goods supply in Himachal Pradesh. Flat terrains allow cheaper mass transit, whereas hilly terrains require specialized engineering structures like tunnels and bridges. Public capital expenditure remains exceptionally high for maintaining hill infrastructure.

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In the context of the mountainous economy of Himachal Pradesh, how does difficult topographical terrain primarily impact the cost structure of infrastructural development and goods supply?

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