The structure employed is a small open economy, with one city and rural hinterland, two traded goods, transport sector, specific factors, mobile labour. A socially profitable programme will promote not only internal, but also external trade. Theory numerical examples indicate that aggregate social profitability its distribution between town country are rather insensitive to the city’s location ...

The flow of resources across sectors to their best use, with concomitant entry and exit, is central the functioning welfare properties a market economy. Nevertheless, most industrial organization research, including applications competition policy, undertakes partial equilibrium analysis in single sector, often fixed number firms. This article examines policy simple, multi-sector, general model...