Characteristics of transport demand are inferred from spatial equilibrium with exogenous locations. For non-trivial spatial distributions of firms and markets I derive computable expressions for elasticity of transport demand, producer surplus, and consumer surplus as a function of the mass-distance price of transport. Producer surplus is likely to have one or more local maxima, suggesting a disincentive for producers to minimise transport costs. Numerical simulation is used to illustrate results. A method is suggested for computing simultaneous transport and commodity market equilibria for spatially dispersed markets. (Author/publisher).
Abstract