Tyler Cowen asks "Why don't cities grow without limit." He comments on (and links to) a Paul Krugman discussion of the same topic.
"City size" as the focus has problems. What is the boundary of "the city"? And cities are about spatial arrangements. Spatial arrangements involve many trade-offs and are necessarily emergent. Emergent arrangements would bend and displace the (imaginary) marginal benefit and marginal cost functions. This goes on as the "cities" keep spreading out.
But emergent spatial arrangements are up against the durability of physical forms as well as the durability of politicized land use regulations.
All of this sounds like Jane Jacobs v Robert Moses all over again. But times have changed insofar as people now link up in many ways. People in cities want space as well as access. That alone suggests a trade off. But they want access to many things. They also choose the mode of access to all these things (electronic v. traditional). "Geography matters more than ever despite the digital revolution ..." And more potential trade-offs than ever.