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Demand Function and Location Theory of the Firm Under Price Uncertainty

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  • Chao-cheng Mai

    (Institute of the Three Principles of the People, Academia Sinica, Taiwan 115, Republic of China)

Abstract

This paper attempts to introduce explicitly the role of demand function into a profit-maximizing location model and examine the effects of increased price uncertainty on the optimum location of the risk-neutral firm. It has been shown that the results derived crucially depend upon the interaction between demand function, production function and transport costs structure.

Suggested Citation

  • Chao-cheng Mai, 1984. "Demand Function and Location Theory of the Firm Under Price Uncertainty," Urban Studies, Urban Studies Journal Limited, vol. 21(4), pages 459-464, November.
    • Handle: RePEc:sae:urbstu:v:21:y:1984:i:4:p:459-464
    DOI: 10.1080/00420988420080841
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    References listed on IDEAS

    as
    1. Batra, Raveendra N & Ullah, Aman, 1974. "Competitive Firm and the Theory of Input Demand under Price Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 537-548, May/June.
    2. Leland, Hayne E, 1972. "Theory of the Firm Facing Uncertain Demand," American Economic Review, American Economic Association, vol. 62(3), pages 278-291, June.
    3. Miller, Stephen M. & Jensen, Oscar W., 1978. "Location and the theory of production : A review, summary and critique of recent contributions," Regional Science and Urban Economics, Elsevier, vol. 8(2), pages 117-128, May.
    4. Sakashita, Noboru, 1980. "The location theory of firm revisited impacts of rising energy prices," Regional Science and Urban Economics, Elsevier, vol. 10(3), pages 423-428, August.
    5. Mai, Chao-cheng, 1981. "Optimum location and the theory of the firm under demand uncertainty," Regional Science and Urban Economics, Elsevier, vol. 11(4), pages 549-557, November.
    6. Khalili, Amir & Mathur, Vijay K. & Bodenhorn, Diran, 1974. "Location and the theory of production: A generalization," Journal of Economic Theory, Elsevier, vol. 9(4), pages 467-475, December.
    7. Mathur, Vijay K., 1979. "Some unresolved issues in the location theory of the firm," Journal of Urban Economics, Elsevier, vol. 6(3), pages 299-318, July.
    8. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
    9. Coes, Donald V, 1977. "Firm Output and Changes in Uncertainty," American Economic Review, American Economic Association, vol. 67(2), pages 249-251, March.
    10. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
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