Question

Why do cities exist? Discuss the following assumption eliminate the possibility of cities. 1. equal productivity 2. constant returns to scale in exchange 3. constant return to scale in production.

Answer 1

The conglomeration of a large number of people settling in together in a defined area, with adequate facilities of distributed land, mode of transport, house for the people and means of communication, is called a city. In the recent years, the term ‘city’ is referred to the highly developed area of land in terms of economy and socio-cultural development with proper sanitation facilities for all and huge opportunity for human growth and development.

                               The existence of cities can be attributed to the elimination possibility of the following factors:

1. : Equal Productivity: Lack of equal production in primary condition that cities exist. When there is equal productivity in a particular area, the people residing in the area will be self-dependent and there will be no need for the people of the area to conglomerate in a particular area for their sustenance. A self-dependent individual will not require the need to depend on any other individual or for that matter on an administration for his livelihood. This non-dependency will not allow the cities to develop in the first place.
2. : Constant returns to scale of exchange: Another factor that contributes to the existence of the cities is the non-existence of the constant returns to the scale of exchange. If the scale of exchange exists, then individuals who have abundance of one item and the lack of another item will exchange the item which they have in abundance with the country which lacks it for the item which it lacks with the country which has this item in abundance. This will mean that multiple individuals or families will be self-dependent among themselves, thereby negating the necessity of cities.
3. Constant return to scale of production: Another critical factor due to which cities exist is the absence of constant return to the scale of production. If the return to the scale of production exists, the individuals who produce a particular product will directly be able to exchange the product with the individual who produces another product, thereby creating an economic condition where each individual is being self-dependent by exchanging their production with other individuals. This will negate the requirement of a middle men or trading organization. In the broader sense, the necessity of a city will be non-existent.