Question Details
(solution) Consider Hotelling's location model. The length of the city is 20
Consider Hotelling's location model. The length of the city is 20 miles. Two firms, 1 and 2, want to sell a good in the city. Each firm has a constant marginal and average cost of $1. Consumers are distributed evenly along the main street. Each consumer buys at most one unit of the good and his reservation price for the good is $50. Each consumer faces a transportation cost of $1 per mile.
(1) Suppose that the two firms must charge $2 per unit. Find a pure-strategy Nash equilibrium (or equilibria) in location strategies. Explain your answer.
(2) Suppose that firm 1 is permanently located 2 miles from the left end of city and firm 2 is permanently located 2 miles from the right end of city. Find a pure-strategy Nash equilibrium (or equilibria) in prices
Solution details:
Answered
QUALITY
Approved
ANSWER RATING
This question was answered on: Sep 13, 2020
PRICE: $15
Solution~00021147772416.docx (25.37 KB)
This attachment is locked

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
About this Question
STATUSAnswered
QUALITYApproved
DATE ANSWEREDSep 13, 2020
EXPERTTutor
ANSWER RATING
GET INSTANT HELP/h4>
We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.
You can also use these solutions:
- As a reference for in-depth understanding of the subject.
- As a source of ideas / reasoning for your own research (if properly referenced)
- For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
NEW ASSIGNMENT HELP?
Order New Solution. Quick Turnaround
Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.
WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.
