When economic activity is concentrated over space or over time, it
is more efficient. Most production occurs in geographic hot spots,
and most production occurs between 9 and 12 in the morning and 1
to 5 in the afternoon on weekdays. The thick-market efficiencies
that encourage the concentration of activity in certain time periods
may be internal to the firm, or they may be external to the firm.
When they are internal, the firm can make efficient arrangements
to take advantage of the effects. The firm should martial all its
forces from time to time in bursts of activity. When thick-market
effects are external to the firm, the possibility of indeterminacy can
arise. Aggregate fluctuations may arise with either internal or
external thick-market effects.
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