First, i would like to say that the business cluster effect is playing an increasingly essential role in our daily life. Seeing that many large scale business clusters in foreign countries, such as shopping malls, are located at suburben areas ,thus this paper forcuses on causes of business clusters formation by means of annular market model of Salop.S.C. The conclusion is that consumers prefer to purchase desired products from places of business clusters with the existence of transport costs in the condition of imperfect information.
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