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Suppose 2 firms are found on the real line [0,1]. Firm 1 is located at a=.15, and Firm 2 is located at 1-b, where b=.15. Assume P1=P2=$10. Consumers face a distance cost of $2 per square unit of distance. What can you infer about the market share of each firm? Suppose Firm One lowers its price to $9, how does this change the market share? Further, suppose transportation costs increase to $5 per square unit of distance. How does this additional change alter the market shares of the two firms?
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Indifference theory can explain all rational choices and behavior..Try the theoryout on this situation. Suppose the only consideration for couples to have a bby or not was money
For each of the following utility functions, draw the three indierence curves that correspond to the three stated utility levels, labeling each curve with the corresponding utility level. Label any intercepts or inks in the line to fully identify ..
You want to be part of the Green Revolution and are looking to find ways to reduce your energy use. But first, you must know what your energy use is.
The Davis Farmer’s Market sells corn for $1 an ear. At this price, Gunrock buys 6 ears each Wednesday. What would happen to Gunrock’s consumption of corn if the market offered corn at $1 an ear for the first 6 years, but 50 cents an ear for each addi..
Should price stability be the goal of monetary policy Explain your responses. Compare and contrast the impact of an unexpected shift to a more expansionary monetary policy under rational and adaptive expectations. Are the implications of the two t..
two firms produce differentiated products and set prices to maximize their individual profits. demand functions for the
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Elderly population is growing more rapidly than the total population - the number of workers is rising slowly, retirees are rising quickly. If total expenditure were frozen, what would happen to benefits per retiree
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