Who do cities exist? - Transport cost
7 important questions on Who do cities exist? - Transport cost
What are terminal costs?
Shipping costs consist of 2 components:
- Terminal costs
- Variable costs
Transport costs= c + bk. What are avg costs? (distance is k)
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If input costs>output costs where to locate your factory?
2 sorts of location choices:
- Resource orientated (weight losing production)
- Market orientated (weight gaining production)
Resource orientated characterics:
- Perishable inputs (milk, wine)
- Volume losing (cotton baling)
- Weight losing (furniture)
- Fragile/hazardous (giftig)
Market orientated characteristics
- Weight gaining (beer)
- Perishable outputs (bread)
- Volume gaining (auto assembly)
- Hazardous outputs (weapons)
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