| Abstract: | 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. |
