The Optimal Shape of a Market Area

The Optimal Shape of a Market Area

The above example considers an isotropic plain, and commercial activity has a range of 10 km. If the activity is alone (A), it will simply offer its services to an area corresponding to its range while the rest of the territory will not be serviced. The situation remains similar if a limited number of activities are present (B). However, the purpose of commercial activities is to service the entire demand, if possible, as any additional demand represents a market opportunity to be captured. This requires the whole territory to be serviced by a set of evenly spaced markets (in a territorial isotropy condition). However, solutions C and D are unacceptable since in the first case, some areas are left non-serviced, and in the second case, ranges are overlapping. The optimal solution to this spatial coverage problem is developing hexagonal market areas (E), which represents the optimal shape for market areas with full spatial coverage.