Who developed the Zone of Profitability to determine locations manufacturing plants could maximize profit?

Who developed the Zone of Profitability to determine locations manufacturing plants could maximize profit?

• A. Koppen, Vladimir
• B. Losch, August
• C. Alfred Weber
• D. Von Thunen

Answer: (A)

This question tests a specific location theory idea about where a manufacturing plant should sit to maximize profit. The concept of the zone of profitability was developed by August Losch. He imagined a central market or set of markets and asked where a plant would be profitable to serve those markets when transport costs and product prices are taken into account. Around the market there’s a region where producing in that location yields positive profit—the zone of profitability. Beyond that zone, transport costs erode profits. This idea is distinct from other location theories: Alfred Weber’s least-cost theory focuses on minimizing overall costs (like transport, labor, and agglomeration) to locate a plant, rather than maximizing profit from serving multiple markets; Von Thünen’s model looks at land use and rent radiating outward from a city in agricultural terms; and Koppen is known for climate classification, not location profitability. So the best fit for this concept is August Losch’s zone of profitability.

This question tests a specific location theory idea about where a manufacturing plant should sit to maximize profit. The concept of the zone of profitability was developed by August Losch. He imagined a central market or set of markets and asked where a plant would be profitable to serve those markets when transport costs and product prices are taken into account. Around the market there’s a region where producing in that location yields positive profit—the zone of profitability. Beyond that zone, transport costs erode profits.

This idea is distinct from other location theories: Alfred Weber’s least-cost theory focuses on minimizing overall costs (like transport, labor, and agglomeration) to locate a plant, rather than maximizing profit from serving multiple markets; Von Thünen’s model looks at land use and rent radiating outward from a city in agricultural terms; and Koppen is known for climate classification, not location profitability. So the best fit for this concept is August Losch’s zone of profitability.