The transport cost is about K25 for each 50km segment of transporting a bulk product. If the
Question:
The transport cost is about K25 for each 50km segment of transporting a bulk product. If the destination market price is K80,
(a) formulate the price-distance relationship equation
(b) generate a price-distance schedule for distance segment values of 0 to 4.
(c) from your schedule in (b), with justification for your answer, at what point does it start to be meaningless to supply into the destination market?
(d) from your schedule in (b),with justification for your answer, what is taking place at distance segment of 4?
(e) from your personal experience in answering this question, explain why rural areas are still low income areas.
(f) What market structure would favour a female suppllier at a distance segment 4 to turn around her fortunes?
Managerial Accounting Tools for business decision making
ISBN: 978-1118096895
6th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso