According to the picture, point F is the location of selling output and getting input. What is correct about the picture?

 

a) Firm will choose the location at the distance far away from the point F and M to the right-hand side of the picture (at 12, 13, or 14 miles away from T)

b) The point at the intersection between transport cost curve and labor cost curve is the best location for the firm, where the labor costs and transport costs are equal.

c) A decrease in the physical weight or unit freight cost will cause the firm to locate far from the market and input, where the labor costs are lower.

d) The firm will choose the location at point F because the firm can make profit from minimizing transport costa by locate at the same location of selling its output and getting its input.

Transcribed Image Text:

50 40 30 20 10 T Procurement cost 2 Sugar plantation (F) Total transport cost = PC + DC Distribution cost 4 6 x (Distance from input source) 8 10 Market (M) 50 40 30 20 10 T Procurement cost 2 Sugar plantation (F) Total transport cost = PC + DC Distribution cost 4 6 x (Distance from input source) 8 10 Market (M)

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According to the picture point F is the location ... View the full answer