Pricing system, distribution of demand and location

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Abstract
Norman G. (1977) Pricing system, distribution of demand and location. Reg. Studies 11, 183–189. Both the pricing system operating in a given market and the distribution of demand over that market are important determinants of locational choice in the market. This paper analyses the nature of these relationships within a simple economy consisting of two spatially distinct sub-markets. We show that, for a number of different pricing systems, location will be chosen in that submarket at which, under the appropriate pricing system, demand is greater. This would suggest that in the absence of offsetting factors, economic activity will tend to agglomerate in major centres, to the detriment of growth in peripheral areas. Modifying influences do exist, and these are considered. The implication remains, however, that larger markets will be able to gain a cumulative advantage over their smaller neighbours.

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