Flashcards: Economic Geography and Market Dynamics — 16 cards

New economic geography — definition?

Study of how spatial distribution affects trade and firm location.

Economic agglomeration — role?

Creates cost savings, innovation, and regional competitiveness.

Spatial distribution of activities — impact?

Affects trade flows, costs, and market access.

Market access — meaning?

Firms' ability to reach and participate in markets.

Trade cost dynamics — trend?

Trade costs have decreased over time.

Market power — characteristic?

Firms can influence prices due to market concentration.

Monopoly vs competition — difference?

Monopoly has one firm; competition has many with limited power.

Location-based cost differences — effect?

Influence firm competitiveness and location choices.

Firm clustering — benefit?

Reduces costs and fosters agglomeration economies.

Market concentration — consequence?

Impacts competition and pricing power.

Firm location decisions — factors?

Costs, market access, competition, capacity, and resources.

Agglomeration effects — benefits?

Cost savings, knowledge spillovers, innovation.

Information asymmetry — effect?

Leads to market inefficiencies and adverse selection.

Market for lemons — illustration?

Shows how info asymmetry reduces market quality.

Strategic expectations — influence?

Shape firms' decisions and market equilibria.

Multiple equilibria — cause?

Arise from expectations and initial market conditions.