Threshold population

Threshold population

In microeconomics, a threshold population is the minimum number of people needed for a service to be worthwhile.

In geography, the minimum number of people necessary before a particular good or service will be provided in an area. Typically a low-order shop (such as a grocer or newsagent) may require only 800 or so customers, whereas a higher-order store such as Marks and Spencer may need a threshold of 70,000 to be profitable, and a university may need 350,000 to be viable.

Thresholds may also be linked to the spending power of customers; this is most obvious in periodic markets in poor countries, where wages are so low that people can buy the goods or services only once in a while.

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