A. In one of the sessions, I talked about the situations you have seen or will see many times in your life, in different part of the world: when two similar firms in the same industry run their businesses next to each other. Two gas stations at the same crossroad. Two banks in the same mall/building and McDonald and Burger King opposite of each other and so on. And you may ask yourself why. This is a puzzle Harold Hotelling solved in his article "Stability in Competition" in Economic Journal in 1929 and we know it now as Hotelling spatial model. Try to summarize his solution by reading his paper (available online) or using any reliable source(s). Make sure defining all required assumptions. NOTE: Wikipedia's page on this issue is not very helpful. Instead, you can use this https://www.jstor.org/stable/2224214 B. In the early 1970s, the six largest manufacturers of ready-to-eat breakfast cereals shared 95 percent of the market. Over the preceding twenty years, these same manufacturers introduced over eighty new varieties of cereals. How would you evaluate this strategy from the viewpoint of the Hotelling spatial model? C. Although this is common for the businesses mentioned above, you don't usually see Herms and Louis Vuitton open their designer bag shops in the exact same location. Why don't we see the same situation for these brands? How does Hotelling answer the problem?