ABSTRACT
This is the first of a series of chapters that deal with the location decisions of firms – a branch of economic geography known as “location theory.” Here we begin a significant departure from the models presented in Part II by shifting our analysis from discrete space to continuous space. This means that, instead of a space comprising a finite set of regions, we consider a space of points, each of which can be defined by a set of (x, y) coordinates. Since, at least in theory, an infinite number of such points exist, analysis in continuous space is more exacting. The advantage is that critical factors such as distance, transportation cost and travel time are “point-to-point” concepts and therefore are more realistically set in continuous space.
