1. A monopoly firm, not able to price discriminate between consumers, serves a city that is a single one-mile road. There are N consumers spaced evenly along the road from west (a = 0) to east (a = 1). Each consumer has a reservation price of V and is willing to buy one unit of the product. A consumer located x units from the city center faces a transport cost of t per unit of distance travelled. The monopoly firm is centrally located at a = and the price set by the firm is p.

(a) Formally derive the firm's total demand function, Q(p).

(b) Formally explain how an increase in the transport cost impacts total demand.