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Two firms are located at opposite ends of a beach. The beach is 5 miles long. 600 consumers are uniformly located on the beach. Each consumer has a perfectly inelastic demand for two units of a good. To get the good, the consumer has to travel to the firm and back. The cost of travel is 0.30d (where d is total distance traveled in miles).
The two firms have identical cost functions, produce identical products, and have a constant MC of production of $2. Both firms can choose their own price. (a) Find the best response function for each firm and solve for the Nash equilibrium prices for each firm
What happened to the Leontief paradox and human capital embodied in US exports was accounted for as a separate factor of production? Does this help to describe why college graduates my favourite international trade more than those would significantly..
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