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According to conventional economic theory market price is fixed by the following mechanism:

Under isotropic conditions, each market has the same polygonal evenly spaced area. This theoretical condition is rarely found in reality. The two most important non-isotropic conditions impacting the shape of market areas are differences in density (depicted here as concentric circles) and accessibility (depicted here as the presence of a

The above example considers an isotropic plain with commercial activity having a range of 10 km. If the activity is alone (A), it will simply offer services to an area corresponding to its range, while the rest of the territory will not be serviced. The situation remains similar if a

A market area has a range and a threshold that determine the profitability of the economic activity that is generating it. The threshold is the minimal market area an activity must have to stay in operation. It represents the spatial threshold of profitability where spatial attributes such as population density and

There is a direct relationship between market size and threshold, which impacts the geography of retail. Each urban center needs a threshold population that varies according to its size to support its activities. Large cities have an important threshold, so there may be few on a specific territory, while many

The above figure considers a fairly uniform distribution of customers on an isotropic plain and a single market where goods and services may be purchased. If each customer is willing to purchase one unit per day and the market needs to sell 11 units per day to cover its costs

Author: Dr. Jean-Paul Rodrigue Concepts and methods in the analysis of market areas such as market size and level of competition. 1. Market Size and Shape Each economic activity has a location, but the various demands (raw materials, labor, parts, services, etc.) and flows each location generates also have a

This example considers 10 airports and their respective market share. This distribution is fairly unequal with a Gini coefficient (G) of 0.392 (|1-1.392|).

This example considers 10 airports and their respective share of the total number of airports (X) and traffic (Y). In this case, traffic distribution is unequal, with the three largest airports accounting for 60% of the market. The largest airport accounts for 25% of the market, while the smallest accounts