ABSTRACT
There are two regions, producing four commodities in all: two circulating capital goods, a single wage good and transportation services. Based on the work of Claire Pavlik, this chapter provides an example of pricing and trading patterns under full capitalist competition for a simple case of two regions. This shows construction of trading and pricing patterns and a wage-profit frontier for a particular location pattern; comparison of wage-profit frontiers for different location patterns; and the existence of reswitching in both a closed inter-regional economy and a single region interacting with a larger economy. The chapter tooks two examples of commodity production in a space economy that demonstrates the conflict of interest among capitalists, workers and landlords. It also examines whether reswitching will occur for a single region that is part of a larger inter-regional trading system. It shows numerically that reswitching is plausible for the entire multi-regional economy as well as for a single region within that economy.
