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Can I get a more detailed explanation of these questions? 2. Consider two regions with the following characteristics: Agriculture population is evenly divided between the
Can I get a more detailed explanation of these questions?
2. Consider two regions with the following characteristics: Agriculture population is evenly divided between the two regions. Manufacturing share of employment: = POP = 0.80 Transport considerations: x = 100; t = $5/unit; Plant fixed costs: F = $125 a. Use the information above to draw a figure similar to Krugman Figure 1.2, relating the share of manufacturing in the West to the share of population in the West. Label the values for the endpoints of your graph. List any assumptions that you needed to make. 5 = POPwed po Postal slope =0.8 0.1 P 1 Sm= Mwes Motor b. Add to your figure line segments that reflect the relative costs of plant location decisions for a new firm. F = $125 = 5x100 - 5 = st* F = $125 = (1 - 5)100.5 = (1 - Sn)-t. By = 0.25 ON = 0.75 Share of New Firm's Production in West M 2 SNM F = (1-5).xt Pl1 5m= Mwes Metal c. Where will the new firm choose to locate its plant(s)? Explain and calculate relevant numbers. East only if sx 0.75 Both if 0.25Step by Step Solution
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