ABSTRACT
Introduction We move away from an emphasis on cities and urban structure at this point and present some classic analyses of the economics of location. Three analyses come to mind straightaway: those of Losch on small service towns and their market areas, of Hotelling on duopolists competing for market areas on a line (two ice-cream vendors on a beach), and Weber on the location of a firm, given its suppliers and demanders at distinct points. We proceed to report on these analyses in some detail. In addition, we consider spatial arbitrage, the phenomenon of prices between demand points and supply points differing by transportation costs, when goods are flowing between the points. This topic is developed with the aid of “the transportation problem” in linear programming. And the topic of linear programming leads us to a consideration of models of land use in cities as linear programs.
