ECON 155 Lecture Notes - Lecture 8: And1
Document Summary
Urbanization makes labor more productive in big cities, the marginal prod of labor. If there is est trans costs prob have market area. Despite the equilibrium beliefs that people always move cities. Urbanization makes labor more productive in big cities, the marginal prod of labor increases with the size of the city. And the market areas change sizes as well. Further increase city 2 further decrease in l and p city 1. Until city 1 no longer has market area. All have same curve of agglomeration going up and costs goi. Industries are very different in terms of reliance of external ecn. Not a lot of connection to lcal eco. Not every city has agglomeration econ as definer of production. City that has agglomeration econ and start off ver y hh sts going up. 3 nation with these type can have a tanleequilibruum. If mot that cities cant be small they cant be too small.
