COMPETITION, SUPPLY AREAS AND INDUSTRIAL-LOCATION - AN EQUILIBRIUM PERSPECTIVE

The relationship between producer supply areas and the location of pro duction is considered for a particular class of manufacturing activity . The spatial structure of production is examined by means of a free-e ntry model, in which producers within a region compete for access to a dispersed commodity input. The situation at long-run equilibrium may be characterised in terms of the output of each producer, the size and shape of his supply area, and the frequency and spacing of producers. This is seen to depend on the prevailing price which is exogenously d etermined. Various features of the equilibrium are then discussed, inc luding the manner in which it differs from the conventional competitiv e equilibrium.