Von Thunen Agricultural Land Use Model

Von Thunen's agricultural land use model simply states that the farther away producers are from the center of the market, the more expensive their goods will become when transportation costs are added in the equation. Land closer to the center of the market will command a higher price due to the fact that transportation costs would be much lower. However, some producers can survive even if they are far from the market center depending on the product they produce.

Milk for example has a short shelf life and therefore must be consumed as quickly as possible. The demand for milk will make it impossible for milk farmers to gain a significant profit if they would have to ship their products to the market at a great distance on a daily basis. Therefore, milk farmers would have to be closer to the market compared to wheat farmers whose products will still allow their business to survive at a greater distance away from the market.









Stocks | Forex | Options | Economics | Bonds | History | Language learning | Technology | Technical Analysis | Fundamental Analysis
Copyright © 2014 econtrader | Risk disclosure | Terms of Use