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ABSTRACTTraditional methods of identifying cost‐oriented market boundaries have three fundamental deficiencies. They assume transportation charges are proportional to distance. Second, where non‐proportional cost‐distance relationships are considered, a high degree of abstraction, generally stopping at the purely theoretical level, is present. Third, because of the time consuming and tedious work required, they appear to be operationally unfeasible.The method presented in this paper accommodates certain non‐linear transportation cost‐distance relationships and is operationally feasible in cost‐oriented market area analyses.