Market-area analysis with a rectangular grid network

Abstract

In this paper, the case of diamond (hexagon) shaped market areas based on a rectangular (triangular) transportation network has been analyzed, and it has been shown that consideration either of free entry or of no entry cases will result in the diamond (hexagonal) shaped market area being the most profitable shape for such an area. Therefore, this shape of market area will always emerge and in the case of free entry will exhaust the region. Of particular merit is the fact that these market areas are closer to reality. Further, weaknesses in the analyses of Mills - Lav and Greenhut - Ohta were exposed and some corrections made.