Inmicroeconomics,economies of density arecost savings resulting from spatial proximity of suppliers or providers. Typically higherpopulation densities allow synergies in service provision leading to lowerunit costs.[1] If large economies of density exist there is an incentive for firms to concentrate and agglomerate.[2]
Typical examples are found inlogistic systems where the distribution or collection of goods is needed, such as solidwaste management.[3] Delivering, for instance, mail in an area with many postboxes results in overall cost savings and thus lower delivery costs.
Different network infrastructures such as electricity or gas networks show as well economies of density.
Economies of density are not to be confused witheconomies of scale where unit costs are not linked to spatial properties.
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