Consider the example shown in Figure 2-1, with the martini-glass shape showing the net price of...

  

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Consider the example shown in Figure 2-1, with the "martini-glass" shape showing the net price of the factory product. Suppose all consumers switch to spring-loaded sneakers, decreasing walking time per round-trip mile from 1/12 hours to 1/18 hours. A. The slope of the net-price curve changes to changes from 16 miles (8 on each side) to and the width of the market area miles (_ on each side). B. Using Figure 2-2 as a starting point, the spring-loaded sneakers change the number of factories in the 48-mile region from miles wide. to _, each with a market area. FIGURE 2-1 Market Area of Factory Price or cost in bread - 6/12 4/12 Price or cost in bread 4/12 Cost of homemade shirt 2 0 Distance to factory (miles) The net price of a factory shirt is the factory price (1/3= 4/12 loaf of bread) plus transport cost (1/12 loaf per round-trip mile). The market area of the factory is the area over which the net price of a factory shirt is less than the cost of a homemade shirt (one loaf). FIGURE 2-2 System of Factory Cities Market area of factory 8 Net price of factory shirt 16 32 Net price of factory shirt 24 Distance from coastline Cost of homemade shirt 40 48 Each factory's market area is 16 miles wide, so a system of factory cities develops with a distance of 16 miles between cities. In this equilibrium, workers specialize, with shirt workers in cities and bread producers in rural areas between the cities. Consider the example shown in Figure 2-1, with the "martini-glass" shape showing the net price of the factory product. Suppose all consumers switch to spring-loaded sneakers, decreasing walking time per round-trip mile from 1/12 hours to 1/18 hours. A. The slope of the net-price curve changes to changes from 16 miles (8 on each side) to and the width of the market area miles (_ on each side). B. Using Figure 2-2 as a starting point, the spring-loaded sneakers change the number of factories in the 48-mile region from miles wide. to _, each with a market area. FIGURE 2-1 Market Area of Factory Price or cost in bread - 6/12 4/12 Price or cost in bread 4/12 Cost of homemade shirt 2 0 Distance to factory (miles) The net price of a factory shirt is the factory price (1/3= 4/12 loaf of bread) plus transport cost (1/12 loaf per round-trip mile). The market area of the factory is the area over which the net price of a factory shirt is less than the cost of a homemade shirt (one loaf). FIGURE 2-2 System of Factory Cities Market area of factory 8 Net price of factory shirt 16 32 Net price of factory shirt 24 Distance from coastline Cost of homemade shirt 40 48 Each factory's market area is 16 miles wide, so a system of factory cities develops with a distance of 16 miles between cities. In this equilibrium, workers specialize, with shirt workers in cities and bread producers in rural areas between the cities.