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Production in Urban Environments

Author

Listed:
  • Oded Hochman
  • Ori Zax

Abstract

We analyze an urban economy with free entry of firms in which prices differ across locations. We show that in a competitive equilibrium, land rent is determined such that firms produce at constant returns to scale point—at minimum average costs. (JEL codes: R32 and R38)

Suggested Citation

  • Oded Hochman & Ori Zax, 2023. "Production in Urban Environments," CESifo Economic Studies, CESifo Group, vol. 69(1), pages 61-68.
    • Handle: RePEc:oup:cesifo:v:69:y:2023:i:1:p:61-68.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifad003
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    More about this item

    Keywords

    agglomeration; constant returns to scale;

    JEL classification:

    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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