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The production‐location problem revisited
Author(s) -
Peeters Dominique,
Thisse JacquesFrançois
Publication year - 2000
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.2000.tb00769.x
Subject(s) - elasticity of substitution , substitution (logic) , production (economics) , mathematical optimization , function (biology) , elasticity (physics) , economics , computer science , microeconomics , mathematics , physics , evolutionary biology , biology , programming language , thermodynamics
. This paper reconsiders the production‐location problem (PLP) initiated by Moses. The PLP is extended to allow for the geographical substitution between input sources, which is likely to occur in an integrated market. An algorithm is then proposed to solve this problem. Finally, using numerical examples, it is shown that small variations in the elasticity of substitution of the production function may lead to substantial jumps in the optimal firm location.