Finally, goods and services are not freely or instantaneously mobile: Transport and communication cost something effort and time. These costs limit the extent to which advantages of natural endowment or economies of spatial concentration can be realized To sum up, an understanding of spatial and regional economic problems can be built on three facts of life:(1) natural-resource advantages, (2)economies of concentration, and (3)costs of transport and communication. In more technical nguage, these foundation stones can be identified as(1)imperfect factor mobility, (2) imperfect divisibility, and (3)imperfect mobility of goods and services. 1.3 REGIONAL ECONOMIC PROBLEMS AND THE PLAN OF THIS BOOK What, then, are the actual problems in which an understanding of spatial economics can be helpful? They arise, as we shall see, on several different levels. Some are primarily microeconomic, involving the spatial preferences, decisions, and experiences of such units as households or business firms. Others involve the behavior of large groups of people, whole industries, or such areas as cities or regions. To give some idea of the range of questions involved and also the approach that this book takes in developing a conceptual framework to handle them, we shall follow here a sequence corresponding to the successive later chapters The business firm is, of course, most directly interested in what regional economics may have to say about choosing a profitable location in relation to given markets, sources of materials, labor, services, and other relevant location factors. A nonbusiness unit such as a household, institution or public facility faces an analogous problem of location choice, though the pecific location factors to be considered may be rather different and less subject to evaluation in terms of price and profit. Our survey of regional economics begins in Chapter 2 by taking a microeconomic viewpoint. That is, all locations, conditions, and activities other than the individual unit in question will be taken as given: The individual unit's problem is to decide what location it prefers The importance of transport and communication services in determining locations(one of the three foundation stones) will become evident in Chapter 2. The relation of distance to the cost of the spatial movement of goods and services, however is not simple. It depends on such factors as route layouts, scale economies in terminal and carriage operations, the length of the journey, the characteristics of the goods and services transferred, and the technical capabilities of the available transport and ommunication media. Chapter 3 identifies and explains such relations and will explore their effects on the advantages of different locations In Chapter 4, an analysis of pricing decisions and demand in a spatial context is developed. This analysis extends some principles of economics concerning the theory of pricing and output decisions to the spatial dimension. As a result, we shall be able to appreciate more fully the relationship between pricing policies and the market area of a seller. We shall find also that space provides yet another dimension for competition among sellers. Further, this analysis will serve as a basis for understanding the location patterns of whole industries. If an individual firm or other unit has any but the most myopic outlook, it will want to know something about shifts in such patterns. For example, a firm producing oil-drilling or refinery equipment should be interested in the locational shifts in the oil industry and a business firm enjoying favorable access to a market should want to know whether it is likely that more competition will be coming its way While some of the issues developed in Chapter 4 concern factors that contribute to the dispersion of sellers within industry, Chapter 5 recognizes the powerful forces that may draw sellers together in space. From an analysis of various types of economies of spatial concentration and a description of empirical evidence bearing on their significance, we shall find that the nature of this foundation stone of location decisions can have important consequences for local areas or regions Chapter 6 introduces explicit recognition of the fact that activities require space Space(or distance, which is simply space in one dimension) plays an interestingly dual role in the location of activities. On the one hand, distance represents cost and inconvenience when there is a need for access(for instance, in commuting to work or delivering a product to the market), and transport and communication represent more or less costly ways of surmounting the handicaps to human interaction imposed by distance. But at the same time, every human activity requires space for itself. In intensively developed areas, sheer elbowroom as well as the amenities of privacy are scarce and valuable. In this context, space and distance appear as assets rather than as liabilities Chapter 6 treats competition for space as a factor helping to determine location patterns and individual choices. The focus here is still more"macro"than the discussion of location patterns developed in preceding chapters, in that it is concerned with the spatial ordering of different types of land use around some special point-for example, zones of different kinds of agriculture around a market center. In Chapter 6, the location patterns of many industries or other activities are considered as constituents of the land-use pattern of an area, like pieces of a jigsaw puzzle. Many of the real problems with which regional economies deal are in fact posed in terms of land use(How is this site or area best used? )rather than in terms of location per se Where is this firm, household, or industry best situated? ) The insights developed in this chapter are relevant, then, not only for the individual locators but also for those owning land, operating transit or other utility services, or otherwise having a stake in what happens to a given piece of territory wtha.he land-use analysis of Chapter 6 serves also as a basis for understanding the spatial organization of economic activity within urban areas. For this reason, Chapter 7 employs the principles of resource allocation that govern land use and exposes the fundamental spatial structure of urban areas. Consideration is given also to the reasons for and implications of changes in urban spatial structure. This analysis provides a framework for understanding a diverse array of problems faced by city planners and community developers and redevelopers In Chapter 8, the focus is broadened once more in order to understand patterns of urbanization within a region: the spacing, sizes, and functions of cities, and particularly the relationship between size and function. Real-world questions involving this so-called central-place analysis include, for example, trends in city-size distributions Is the crossroads hamlet or2 Finally, goods and services are not freely or instantaneously mobile: Transport and communication cost something in effort and time. These costs limit the extent to which advantages of natural endowment or economies of spatial concentration can be realized. To sum up, an understanding of spatial and regional economic problems can be built on three facts of life: (1) natural-resource advantages, (2) economies of concentration, and (3) costs of transport and communication. In more technical language, these foundation stones can be identified as (1) imperfect factor mobility, (2) imperfect divisibility, and (3) imperfect mobility of goods and services. 1.3 REGIONAL ECONOMIC PROBLEMS AND THE PLAN OF THIS BOOK What, then, are the actual problems in which an understanding of spatial economics can be helpful? They arise, as we shall see, on several different levels. Some are primarily microeconomic, involving the spatial preferences, decisions, and experiences of such units as households or business firms. Others involve the behavior of large groups of people, whole industries, or such areas as cities or regions. To give some idea of the range of questions involved and also the approach that this book takes in developing a conceptual framework to handle them, we shall follow here a sequence corresponding to the successive later chapters. The business firm is, of course, most directly interested in what regional economics may have to say about choosing a profitable location in relation to given markets, sources of materials, labor, services, and other relevant location factors. A nonbusiness unit such as a household, institution, or public facility faces an analogous problem of location choice, though the specific location factors to be considered may be rather different and less subject to evaluation in terms of price and profit. Our survey of regional economics begins in Chapter 2 by taking a microeconomic viewpoint. That is, all locations, conditions, and activities other than the individual unit in question will be taken as given: The individual unit's problem is to decide what location it prefers. The importance of transport and communication services in determining locations (one of the three foundation stones) will become evident in Chapter 2. The relation of distance to the cost of the spatial movement of goods and services, however, is not simple. It depends on such factors as route layouts, scale economies in terminal and carriage operations, the length of the journey, the characteristics of the goods and services transferred, and the technical capabilities of the available transport and communication media. Chapter 3 identifies and explains such relations and will explore their effects on the advantages of different locations. In Chapter 4, an analysis of pricing decisions and demand in a spatial context is developed. This analysis extends some principles of economics concerning the theory of pricing and output decisions to the spatial dimension. As a result, we shall be able to appreciate more fully the relationship between pricing policies and the market area of a seller. We shall find also that space provides yet another dimension for competition among sellers. Further, this analysis will serve as a basis for understanding the location patterns of whole industries. If an individual firm or other unit has any but the most myopic outlook, it will want to know something about shifts in such patterns. For example, a firm producing oil-drilling or refinery equipment should be interested in the locational shifts in the oil industry and a business firm enjoying favorable access to a market should want to know whether it is likely that more competition will be coming its way. While some of the issues developed in Chapter 4 concern factors that contribute to the dispersion of sellers within an industry, Chapter 5 recognizes the powerful forces that may draw sellers together in space. From an analysis of various types of economies of spatial concentration and a description of empirical evidence bearing on their significance, we shall find that the nature of this foundation stone of location decisions can have important consequences for local areas or regions. Chapter 6 introduces explicit recognition of the fact that activities require space. Space (or distance, which is simply space in one dimension) plays an interestingly dual role in the location of activities. On the one hand, distance represents cost and inconvenience when there is a need for access (for instance, in commuting to work or delivering a product to the market), and transport and communication represent more or less costly ways of surmounting the handicaps to human interaction imposed by distance. But at the same time, every human activity requires space for itself. In intensively developed areas, sheer elbowroom as well as the amenities of privacy are scarce and valuable. In this context, space and distance appear as assets rather than as liabilities. Chapter 6 treats competition for space as a factor helping to determine location patterns and individual choices. The focus here is still more "macro" than the discussion of location patterns developed in preceding chapters, in that it is concerned with the spatial ordering of different types of land use around some special point—for example, zones of different kinds of agriculture around a market center. In Chapter 6, the location patterns of many industries or other activities are considered as constituents of the land-use pattern of an area, like pieces of a jigsaw puzzle. Many of the real problems with which regional economies deal are in fact posed in terms of land use (How is this site or area best used?) rather than in terms of location per se (Where is this firm, household, or industry best situated?). The insights developed in this chapter are relevant, then, not only for the individual locators but also for those owning land, operating transit or other utility services, or otherwise having a stake in what happens to a given piece of territory. The land-use analysis of Chapter 6 serves also as a basis for understanding the spatial organization of economic activity within urban areas. For this reason, Chapter 7 employs the principles of resource allocation that govern land use and exposes the fundamental spatial structure of urban areas. Consideration is given also to the reasons for and implications of changes in urban spatial structure. This analysis provides a framework for understanding a diverse array of problems faced by city planners and community developers and redevelopers. In Chapter 8, the focus is broadened once more in order to understand patterns of urbanization within a region: the spacing, sizes, and functions of cities, and particularly the relationship between size and function. Real-world questions involving this so-called central-place analysis include, for example, trends in city-size distributions. Is the crossroads hamlet or