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Weber ’ s model on industrial location. Explicit assumptions Natural resources Markets Labour Transport costs Unevenly distributed (ubiquitous/localized)

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Presentation on theme: "Weber ’ s model on industrial location. Explicit assumptions Natural resources Markets Labour Transport costs Unevenly distributed (ubiquitous/localized)"— Presentation transcript:

1 Weber ’ s model on industrial location

2 Explicit assumptions Natural resources Markets Labour Transport costs Unevenly distributed (ubiquitous/localized) Fixed On a plain Fixed Immobile unlimited supply At given wage rate Weight + distance of transport

3 Implicit assumptions Uniform surface Fixed capital Perfect competition Economic men

4 Cost factors affecting industrial locations Transport costs Labour costs Cost of proximity (agglomeration/deglomeration)

5 Varignon frame

6 Material Index total weight of localized raw materials used =--------------------------------- weight of finished products

7 Line graphs

8 Location triangle

9 Isodapane

10 Labour factor

11 the LTCL may not coincide with the cheapest labour site especially significant for attractive labour-intensive industries If the saving in labour cost is greater than the increase in transport cost, he will move to the cheap labour cost site

12 Labour factor Critical isodapane = transport cost at LTCL + labour cost savings at source of cheap labour If the source of cheap labour is inside the critical isodapane, the location is a profitable one (and vice versa).

13 Critical isodapane

14 Agglomeration factor

15 Further exercise


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