Question

question 8

with reference to the model of august lösch, please identify the correct answer by checking the box:

a in the short run market areas are hexagonal
b in the long run market areas are circular
c consumers are scattered on a homogenous plain
d in the long run market areas are triangular
e price elasticity of demand is infinite

Explanation:

🆕 New Concept Discovered: Löschian Location Theory
How spatial competition shapes market boundaries.

Step 1: Analyze the assumptions of August Lösch's model

August Lösch's model of spatial organization (often called the market area theory) builds upon several fundamental assumptions about the landscape and population distribution:

• Homogeneous Plain: The model assumes an unbounded, uniform (homogeneous) plain with an even distribution of raw materials and a population of consumers scattered uniformly across it.
• Consumer Behavior: Consumers are evenly distributed and have identical tastes, preferences, and incomes.
• Transportation: Transport costs are uniform in all directions and are directly proportional to distance.

Looking at the options, Option C ("Consumers are scattered on a homogenous plain") directly matches one of these foundational assumptions.

Step 2: Evaluate the other options

Let's review why the other options are incorrect based on Lösch's theory:

• Option A & B: In the short run, individual producers have circular market areas. In the long run, as more producers enter the market to compete for space, these circular areas press against each other. To cover the entire space without overlaps or unserved gaps, the market areas transition into hexagons, not circles or triangles. Therefore, in the short run they are circular, and in the long run they are hexagonal.
• Option D: As established above, long-run market areas are hexagonal, not triangular.
• Option E: The price elasticity of demand is not assumed to be infinite; consumers face a downward-sloping demand curve where the quantity demanded decreases as the delivered price (factory price + transport cost) increases.

Answer:

C