Give the assumptions of the Hotelling linear or main street model. If a linear market is 10
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Give the assumptions of the Hotelling linear or main street model. If a linear market is 10 kilometers long, there are two suppliers, firm A located 2 kilometers from time left end of the market and firm B located at the right end of the market, and transportation cost t is 1 per unit distance, what are the equilibrium prices and profits per firm? (Assume marginal and average production cost is zero.) Draw a graph illustrating the equilibrium. Show the derivations of your answers.
Related Book For
Finance Applications and Theory
ISBN: 978-0077861681
3rd edition
Authors: Marcia Cornett, Troy Adair
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