Competition, Supply Areas and Industrial Location: An Equilibrium Perspective

John B Parr

The Annals of Regional Science, 1993, vol. 27, issue 3, 210 pages

Abstract: The relationship between producer supply areas and the location of production is considered for a particular class of manufacturing activity. The spatial structure of production is examined by means of a free-entry model, in which producers within a region compete for access to a dispersed commodity input. The situation at long-run equilibrium may be characterized in terms of the output of each producer, the size and shape of his supply area, and the frequency and spacing of producers. This is seen to depend on the prevailing price which is exogenously determined. Various features of the equilibrium are then discussed, including the manner in which it differs from the conventional competitive equilibrium.

Date: 1993
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