Threshold population
Encyclopedia
In microeconomics
, a threshold population is the minimum number of people needed for a service to be worthwhile.
In geography
, a threshold population is the minimum number of people necessary before a particular good or service can be provided in an area. The concept is equivalent to the "range" in central place theory
and retailing
, which delineates the market
area of a central place for a particular good or service, and is dependent on the spatial distribution
of population and the willingness of consumer
s to travel a given distance to purchase particular goods or services.
Typically a low-order shop (such as a grocer or newsagent) may require only 800 or so customers, whereas a higher-order store such as Marks and Spencer or Waitrose may need a threshold of 70,000 to be profitable, and a university may need 350,000 to be viable.
Thresholds may also be linked to the spending power of customers; this is most obvious in periodic markets in poor countries, where wages are so low that people can buy the goods or services only once in a while.
Microeconomics
Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...
, a threshold population is the minimum number of people needed for a service to be worthwhile.
In geography
Geography
Geography is the science that studies the lands, features, inhabitants, and phenomena of Earth. A literal translation would be "to describe or write about the Earth". The first person to use the word "geography" was Eratosthenes...
, a threshold population is the minimum number of people necessary before a particular good or service can be provided in an area. The concept is equivalent to the "range" in central place theory
Central Place Theory
Central place theory is a geographical theory that seeks to explain the number, size and location of human settlements in an urban system. The theory was created by the German geographer Walter Christaller, who asserted that settlements simply functioned as 'central places' providing services to...
and retailing
Retailing
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
, which delineates the market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
area of a central place for a particular good or service, and is dependent on the spatial distribution
Population density
Population density is a measurement of population per unit area or unit volume. It is frequently applied to living organisms, and particularly to humans...
of population and the willingness of consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
s to travel a given distance to purchase particular goods or services.
Typically a low-order shop (such as a grocer or newsagent) may require only 800 or so customers, whereas a higher-order store such as Marks and Spencer or Waitrose may need a threshold of 70,000 to be profitable, and a university may need 350,000 to be viable.
Thresholds may also be linked to the spending power of customers; this is most obvious in periodic markets in poor countries, where wages are so low that people can buy the goods or services only once in a while.