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T HIS PAPER shows how the equilibrium size of marketing plants located in a spatial market depends upon market density (the volume of business per unit of market area). Because the author's interest is primarily in agricultural marketing, arguments are developed in terms of plants assembling and processing a farm commodity produced in a spatial market and in terms of the effect of market density on costs of performing these functions. However, the arguments would apply equally to marketing plants distributing a product among spatially distributed consuming units.The arguments are presented in narrative and graphic form in the first two sections of the paper. In the third section, the arguments are restated in mathematical form to facilitate their adaption to empirical investigation. The fourth section is devoted to possible uses of the results of the analyses in empirical research.It should be emphasized that this paper is devoted to an equilibrium analysis. Consequently, all plant cost functions are long-run. It is assumed in the anlyses that the time period of adjustment is such that fixed capital goods do not restrict adjustments in plant output. A Competitive ModellAssume that at all points in a given farm commodity producing area there is a uniform density of marketings and a uniform farm or local assembly point price for the commodity. Assume also that price is independent of an individual plant's output." Then the average at-farm cost o Published with the approval of the

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