How does the concept of threshold help a business decide on the right location?

What will be an ideal response?


Answer: To determine the extent of a market area, geographers need two pieces of information about a service: its range and its threshold. The range is the maximum distance people are willing to travel to use a service. The second piece of information needed is the threshold, or the minimum number of people needed to support the service.

Every enterprise has a minimum number of customers it needs to generate enough sales to make a profit. Determining the range, a service provider must also determine whether a location is suitable by counting the potential customers inside the irregularly shaped circle. How potential consumers inside the range are counted depends on the product. Convenience stores and fast-food restaurants appeal to nearly everyone, whereas other goods and services appeal primarily to certain consumer groups. Movie theaters and dance clubs attract (mostly) younger people; chiropractors attract (mostly) older folks. Poorer people are drawn to thrift stores; wealthier ones might frequent upscale department stores. If a service appeals to certain customers, then only the type of service that appeals to them should be counted inside the range.

Environmental & Atmospheric Sciences

You might also like to view...

The main source of energy for a hurricane is the

a. ?upper-level jet stream. b. ?rising of warm air and sinking of cold air in the vicinity of weather fronts. c. ?warm ocean water and release of latent heat of condensation. d. ?ocean currents and tides. e. ?solar radiation.

Environmental & Atmospheric Sciences

What were the consequences of ice-age climate for the parts of the continental U.S. not covered in ice during the last ice age?

What will be an ideal response?

Environmental & Atmospheric Sciences

The classification of rocks into igneous, metamorphic, and sedimentary rocks is a genetic classification. Create a descriptive classification of rocks

Compare that classification system to the genetic one. Assess the strengths and weaknesses of each system. What will be an ideal response?

Environmental & Atmospheric Sciences

________ would have the largest capacity to naturally remove sewage pollutants

A) Slightly clayey sand B) Fractured granite C) Well-sorted, coarse gravel D) Limestone with solution channels and caverns

Environmental & Atmospheric Sciences