Losch's Model

Losch's Model, developed by economist August Lösch in the 1940s, explains how businesses choose locations for optimal profit. It suggests that companies prefer to set up shop where they can maximize customer access while minimizing costs. The model considers factors like transportation costs, market size, and competition. Losch posits that economic activities are distributed in a way that balances these elements, leading to a pattern of settlement and commercial activities that supports both businesses and consumers, ultimately influencing urban development and regional planning.