Spatial Price Equilibrium

Spatial Price Equilibrium refers to a situation where prices for the same good are balanced across different locations, taking into account transportation costs and market conditions. In this state, no trader can profitably buy a product in one place and sell it elsewhere for a higher price after transportation expenses. This balance ensures that supply and demand are aligned regionally, preventing arbitrage opportunities, and indicating that markets are efficiently integrated across locations. Essentially, it’s the natural point where prices equalize considering distances and costs of moving goods between areas.