Microeconomics and the Space Economy: The Effectiveness of an Oligopolistic Market Economy

Microeconomics and the Space Economy: The Effectiveness of an Oligopolistic Market Economy

Microeconomics and the Space Economy: The Effectiveness of an Oligopolistic Market Economy

Microeconomics and the Space Economy: The Effectiveness of an Oligopolistic Market Economy

Excerpt

Scatter many buyers, disperse many sellers, imagine a land surface of uneven resources, visualize cities and towns of all sizes, some of which are production centers of type A, type B, . . . , type N--and what happens to microeconomic theory? This question forms the focal point of this book. Our inquiry, in the form of a series of related essays, is designed to determine the impact of the concept of space on microeconomic theory.

We do not expect that any chapter in this book represents the last word on even one aspect of microeconomics. Indeed, refinements by other writers may eventually cause economists to conclude that the dimension of space as incorporated into microeconomics in this book adds little to our knowledge. Nevertheless, we believe our present excursion is necessary and worth while. Certainly, it will at least throw more light on economic theory--its method, objectives, and potentials.

There are many who, when they think of space, visualize the so-called transportation model, or the simplex linear programming technique. These persons may be displeased by our failure to make applications and developments of this kind. However, although programming itself' is a most rewarding field, our purpose is much more basic (and modest) than one which would attempt not only to apply space to basic economic theory but also to apply it via linear programming. We follow the typical resource-allocation approach; that is, for the most part in this book, we use the classical cost models and tools.

We are chiefly concerned with re-evaluating certain fundamental theorems of pure competition to see whether they hold up when economic relations are conceived to be subject to distance as well as time. And, as we noted, we do this in a rather conventional way. Nevertheless, the present book will uncover new vistas for economists--especially those who enjoy dabbling in applied economics-for, if traditional theory is re-examined in the light of economic relations spread out over . . .

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