Question: . ( 8 points ) A multi - sector model Consider a version of the manufacturing bid - rent curve, but with two sectors .

.(8 points) A multi-sector model Consider a version of the manufacturing bid-rent curve, but with two sectors. Let x1 and x2 be the distance that firms in sector 1 and sector 2 locate away from the city center. Firms face freight, labor, and land costs but no intermediate goods cost. To simplify the algebra, lets also assume that firms in each sector use only one unit of land (and thus the land cost, LC(xi)= P(xi) for i =1,2. The labor costs for each firm (as a function of distance to center) is given by: L(x1)=20 A1 x1 L(x2)=30 A2 x2 The freight costs for each firm as a function of distance is given by F(x1)=(B1+3) x1 F(x2)=(B2+3) x2

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