Location Theory is a branch of economic geography that examines how the geographical location of businesses and industries affects their operations and success. It seeks to understand the optimal placement of these entities to minimize costs and maximize profits, considering factors like transportation, resources, and market access. Key concepts in Location Theory include central place theory, which explains the size and distribution of cities, and agglomeration economies, which describe the benefits businesses gain by being close to each other. By analyzing these factors, Location Theory helps in urban planning and economic development strategies.