Edwin S. Mills presents an aggregative model of resource allocation in a metropolitan area to explain urban sizes and structures. The model assumes that cities emerge due to production and income opportunities, with production functions central to understanding city size and structure. Key factors include input substitution, technology, and varying land productivity. The model acknowledges that land is not homogeneous and production functions may exhibit increasing or decreasing returns to scale, which influence urban development. The model considers three main activities: goods production, intracity transportation, and housing. Goods production is assumed to have increasing or decreasing returns, with the city's location influenced by efficiency parameters. Transportation links the central business district (CBD) with suburbs, with factor substitution possible between land, labor, and capital. Housing production is aggregated with other goods, with land use determined by competition and transportation costs. Market conditions assume competitive factor markets, with wages and capital rental rates exogenous. The CBD is circular, with land use determined by marginal productivity conditions. Housing consumption per worker is independent of distance, and transportation costs are proportional to land rent. The model also considers land values at the city's edge, influenced by agricultural opportunity costs. The model's solution involves solving differential equations for land use, transportation, and population distribution. Key endogenous variables include land rent, population distribution, and city boundaries. The model's results show that land use in the CBD and suburbs depends on transportation and housing demands, with population density decreasing as distance from the city center increases. The model also addresses congestion and land allocation, showing that larger cities may experience congestion due to rapid adjustments in land use and transportation needs. The model provides insights into urban structure, land use, and the factors influencing city size and growth.Edwin S. Mills presents an aggregative model of resource allocation in a metropolitan area to explain urban sizes and structures. The model assumes that cities emerge due to production and income opportunities, with production functions central to understanding city size and structure. Key factors include input substitution, technology, and varying land productivity. The model acknowledges that land is not homogeneous and production functions may exhibit increasing or decreasing returns to scale, which influence urban development. The model considers three main activities: goods production, intracity transportation, and housing. Goods production is assumed to have increasing or decreasing returns, with the city's location influenced by efficiency parameters. Transportation links the central business district (CBD) with suburbs, with factor substitution possible between land, labor, and capital. Housing production is aggregated with other goods, with land use determined by competition and transportation costs. Market conditions assume competitive factor markets, with wages and capital rental rates exogenous. The CBD is circular, with land use determined by marginal productivity conditions. Housing consumption per worker is independent of distance, and transportation costs are proportional to land rent. The model also considers land values at the city's edge, influenced by agricultural opportunity costs. The model's solution involves solving differential equations for land use, transportation, and population distribution. Key endogenous variables include land rent, population distribution, and city boundaries. The model's results show that land use in the CBD and suburbs depends on transportation and housing demands, with population density decreasing as distance from the city center increases. The model also addresses congestion and land allocation, showing that larger cities may experience congestion due to rapid adjustments in land use and transportation needs. The model provides insights into urban structure, land use, and the factors influencing city size and growth.