82-102). Studies have demonstrated that a variety of factors, including infrastructure development, are capable of exerting significant impacts on location decisions (Kantor, 1987, pp. 510-511, 515-516).
Location theory, among other things, attempts to explain and predict the locational decisions, and the spatial patterns of that are the products of the aggregate locational decisions (Levy, 1990, pp. 4-8). The initial assumption upon which location theory was based was that entrepreneurs attempted to maximize profits in the context of prices fixed by the market, where they possessed perfect information concerning the relative costs associated with all potential locations. Thus, early location theory explained all locational decisions in the context of differences between potential locations with respect to production and transportation costs. This conceptual approach also was applied to location decisions by public entities.
While urban economics is concerned with location patterns of households, firms, and other entities which locate in densely developed areas, the body of knowledge also encompasses such considerations as how the patterns of location evolve and change, how the patterns of location are affected by government expenditures, taxes, and regulations, and how the patterns of location affect the economic performance of both firm