Question: 5. Consider the matching model in a spatial context. Workers are uniformly distributed around a wheel that is 12 units. Each firm chooses an address

5. Consider the matching model in a spatial context. Workers are uniformly distributed around a wheel that is 12 units. Each firm chooses an address on the wheel and hires two workers. The cost of commuting is incorporated into the market wage: wage 18 + 12*d, where d is the distance from the worker to the nearest firm (in units). Illustrate the determination of the wage in a city with 2 firms that each hire 2 workers and a city with 4 firms that each hire 2 workers. The wage for each worker in a city with 2 firms is $ The wage for each worker in a city with 6 firms is $ The benefit to firm locating in the cluster is $ per worker
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