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MONOPSONY AND PLANT LOCATION IN A THÜNEN LAND USE MODEL *
Author(s) -
Jones Donald W.
Publication year - 1988
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1988.tb01085.x
Subject(s) - monopsony , profit (economics) , work (physics) , economics , competition (biology) , scale (ratio) , microeconomics , economies of scale , industrial organization , econometrics , geography , engineering , ecology , mechanical engineering , cartography , biology
. Previous work has developed a method for studying noninfinitesimal operational units, called “plantations,” with the Thüen model. In that model, increasing returns to scale generate large operational units, but the potential market power conferred by the scale economies is sidestepped as an issue. The present work introduces finite supply elasticities and examines their locational impacts. The profit‐maximizing monopsonistic plantation is smaller, and the shipment distance for its processed output is shorter, than for a comparable competitive plantation. The present approach does not involve spatial competition strategies.