Location of firms with input transactions

The locations of two firms with input - output linkages are studied. First, from a study of the equilibrium locations it is shown that there are generally an infinite number of equilibrium locational patterns for such a system, and it is argued that the actual equilibrium locations can only be determined by considering the dynamic process of the equilibrium. Then, the optimal locations are obtained, and compared with equilibrium locations. A mechanical model and a programming model are proposed to obtain the optimal locations and the equilibrium locations, respectively.