a. You are the seller of "sour-spicy mixian", the two closest mixian competitors to you are "very sour mixian" and "very spicy mixian" respectively, and your closest substitute is "sour-spicy beef rice". Use the Salop's model and graphically illustrate the impacts of the following events to your market share : i. If the price of "very spicy mixian" decreases ii. If the price of "sour-spicy beef rice" increases

b. The cost function of Firm X which produces product 1 and product 2 is shown as follow: C(q1, q2 ) = 1000 + 4q1 2 + 20q2 + 0.5q12 If 25% of the total products are product 1 and the remaining are product 2, calculate the Ray average cost and Incremental cost for product 1.

c. The market demand function for shield in the competitive market is = 200,000 1,000. Each shield requires 2 units of Vibanum (V) and 1 unit of labor (L). The wage rate is constant at $40 per unit. Suppose all Vibanums are produced by a monopolist with constant marginal costs of $20 per Vibanum. i. What price, , does the monopolist charge for the Vibanum ? ii. What price would it charge for shield if it vertically integrated into the shield market?