THE LOCATION THEORY OF THE PLANTATION*

ABSTRACT This paper develops a method for studying noninfinitesimal operational units, with the Thünen location and land use model. With constant returns to scale and perfect divisibility of nonland inputs, all operational units would occupy only a point on the landscape. The present model uses increasing returns to scale to generate large operational units, called “plantations” and studies the comparative statics. The setting of the model is an agricultural operation in which some processing of raw crop must be conducted prior to shipment to market. The processing is assumed to have increasing returns to scale.     

OPTIMUM LOCATION AND THEORY OF THE FIRM UNDER A REGULATORY CONSTRAINT*

This paper attempts to incorporate space in the theory of a regulated firm. It will show that the A-J effects are not affected in a spatial setting. In addition, it will also demonstrate that as the difference between the regulated fair rate of return and the unconstrained profit-maximizing rate of return on capital becomes greater, the optimum location of the regulated firm moves towards the site of the product market, if capital and labor are complements (substitutes) and if marginal transportation costs (with respect to distance) are an increasing (decreasing) function of labor usage.     

THE SCOPE FOR PURE PROFITS IN A STANDARD LOCATION MODEL*

ABSTRACT. This paper examines the possibility of sustaining a collusive equilibrium in a standard location model. Drawing on recent developments in game theory, it is suggested that collusion is only feasible if market areas lie within a certain range. When market areas are large the threat of entry is likely to undermine any collusive agreement. In contrast when market areas are small, defection from the cartel is shown to be profitable. Thus collusion is shown to be feasible only when market areas and demand lie within certain bounds. More generally, this result appears to be consistent with the somewhat ambiguous empirical evidence which suggests that competitive pricing behavior is likely to prevail in periods of excessively high demand and during recessions.     

LOCATION,THEORY OF PRODUCTION,AND VARIABLE TRANSPORTATION RATES*

ABSTRACT. The question of what conditions insure independence between location and output decisions is investigated within the context of triangle space. Assuming that transportation rates vary with quantity and distance, it is shown that this independence is insured if the production function generates a linear expansion path and the following are all constant: transportation rate elasticities with respect to distance and quantity, and the price elasticity of demand for inputs.