THE ECONOMIC-LAW OF MARKET AREAS - A FURTHER DISCUSSION

The Economic Law of Market Areas, so named by Fetter, is concerned wit h the division of a territory between two competing centers. It is arg ued that this Law can be conveniently examined in terms of six cases, each of which is specified by a combination of differentials in freigh t rates and prices at the two centers. The locational significance of each case is considered, along with the form and dimensions of the mar ket-area boundary between the two centers. Three of the cases are each shown to subsume a special case. It is further shown that for any cas e except one, a reversal of the differentials between the two centers, while resulting in a symmetrically-equivalent outcome, requires a dif ferent (and usually substantial) respecification of the case.