Consider a region that produces lemons and ice and consumes lemonade (lemons

and ice together). All resources are distributed uniformly throughout the region,

and all people are equally productive in producing lemons and ice. There are

scale economies in the production of ice, causing the development of an ice

factory and a factory city. Suppose that a small refrigerator is introduced and

imported into the region, providing an alternative to the ice purchased from ice

factories. Explain the effects of the refrigerator on (a) the market area of the ice

factory and (b) the size of the city surrounding the ice factory.