Launhardtsch funnel
The Launhardt funnel shows the relationship between the local price and the distance between the place of production and sale of a good . The method goes back to the German mathematician and engineer Wilhelm Launhardt .
Assuming a linear relationship between local price and transport costs , as well as between local price and distance , all sales locations with the same local price can be shown as points on a circle around the production plant. A funnel-shaped structure is thus obtained in a three-dimensional representation. With the help of this model, spatial competitive relationships between several providers can be examined. The effects of tariffs can also be shown well.
