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[1] Suppose a transport cost-oriented rm consumes two inputs [one from source 11: the other from source 12] in order to produce one output, which

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[1] Suppose a transport cost-oriented rm consumes two inputs [one from source 11: the other from source 12] in order to produce one output, which is consumed at the output market M. 3] Assume M's monetary weight equals $200 and the monetary weights for 11 as well as for 12 equal $100 each. Where, if any, is the Nash Equilibrium? b) Now assume the monetary weight of input source Il increases to $300 and the one for I2 falls to $0; M's monetary weight also grows to $300; where will the company locate now? Be precise. c) Is it possible that the rm's transfer-cost-minimizing location can be anywhere? If yes, under what circumstances? If no, why not

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