Solve clearly..

Question 3 Consider the model in question 1. Not yet answered Solve for the number of firms which would minimize the sum of costs (aggregate transportation costs + total fixed costs) in the economy. Marked out of 1 Flag This social optimal number of firm N$ is N$ = (c) question The number that enters in (c) isQuestion 1 Now consider the Salop circular model. Assume that firms' cost functions are C(q) = 0.25 (with zero marginal Not yet costs). Assume that consumers incur transportation costs which are linear in the distance travelled; specifically, a answered consumer incurs transportation costs of 2 | d| from travelling a distance d. A consumer buys only one unit of the Marked out of 1 product, and derives 5 units of utility from consuming it. Flag The firms engage in a two-stage game: they choose whether to enter in the first stage, and prices in the second question stage. As in class, assume that each of the /V firms who decide to enter the market locate in equidistant fashion along the circular city. Solve for each firm's demand function, otain the best response function of firm i, and solve for the equilibrium price, assuming /V firms are in the market. The equilibrium price (as a function of /V ) is a following function. P = (@) The number that enters in (a) is :Question 2 Consider the model in question 1. Not yet answered Given the answer to question 1, solve for the number of firms who would have entered the market, assuming that firms enter only when they foresee that they will be able to recoup their fixed costs from doing so. (The answer does Marked out of 1 not have to be an integer). Flag question The equilibrium number of firm N is N* = (b)v2 The number that enters in (b) is