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Land Use Theory and Factor Intensities
Author(s) -
Bannister Geoffrey
Publication year - 1977
Publication title -
geographical analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 65
eISSN - 1538-4632
pISSN - 0016-7363
DOI - 10.1111/j.1538-4632.1977.tb00586.x
Subject(s) - economics , flexibility (engineering) , production (economics) , variable (mathematics) , interdependence , econometrics , marginal cost , productivity , revenue , marginal revenue , mathematical economics , microeconomics , production theory , factors of production , marginal product , mathematical optimization , mathematics , macroeconomics , mathematical analysis , management , accounting , political science , law
Although Thünen's rent theory has been formalized and extended, his interdependent spatial theory of factor intensities has received little attention. The solution must be developed from a fully specified rent equation that recognizes the dependence of outputs on inputs, and the important distinction between fixed and variable costs. A general solution is found for the one‐market, one‐productive‐factor case, with the limiting restriction that marginal revenue productivity must be rising more slowly than marginal costs. The flexibility and power of Thünen's model is shown by developing, from the general solution, scenarios under various market and production conditions.