In Von Thunen theory of "The Isolated State", he started out from Adam Smith's idea of "economic man": that the farmer is expected to maximize his profit ("economic rent") from his farmland. Thünen, as a landlord, knew that such returns depends on an optimal use of the land surfaces and the transport costs. In concentrating on the effects of these two variables on profits, removal of other factors results in a homogeneous – and isolated – state: A circular, completely undilating plane with a single, dominant market in the center and no interactions with the outside. The economy in the surrounding rural area would have to rearrange itself according to economic behavior in such a way that each industry brings optimal profit in:
Transport cost depends on the distance from the market and different kind of products. The gain from farming per unit area (vocational rent) decreases with increasing distance from the market. The minimum price of a commodity is calculated by vocational rent, transport costs and fixed production costs – the profit is then the difference between the costs and the fixed market price. Idealized pattern of agricultural land use zones in Thünen's model
Transport cost depends on the distance from the market and different kind of products. The gain from farming per unit area (vocational rent) decreases with increasing distance from the market. The minimum price of a commodity is calculated by vocational rent, transport costs and fixed production costs – the profit is then the difference between the costs and the fixed market price. Idealized pattern of agricultural land use zones in Thünen's model