Suppose that you are the owner of a bakery. The customers who buy the cakes you bake have different tastes x for the chocolate content, with x ranging from 0 to 1. The total number of customers is N = 100 are equally distributed along the [0,1] line. If x is the customer’s most preferred chocolate content (location of the customer), and the cakes have chocolate content z, then customer x bears a unit utility cost of $1. Suppose that all customers' reservation price for a slice of a cake is $3. The marginal cost of producing one slice of a cake of any chocolate content is equal to $1. Suppose that you would always like to serve all the customers.

What is the "marginal cost of each unit is (c)" ?

What is the "set up cost of each store is F" ?

What is the number of the retail shop (n)?

What is the transportation cost ( t ) ?

What is the reservation price (V) ?

Answer rating: 100% (QA)

Given information Number of customer100 Customers are located equally on a straight line curve with ... View the full answer