Consider a thermal power plant trying to decide its location between two competing suppliers of coal: Mine A and Mine B$.$ The marginal cost of Mine A is $4$ while that of Mine B is $6.$ The per unit transportation cost of coal between the two mine locations is $6.$ The plant will purchase coal from one of the mines so as to minimize the sum of the price it pays and the transportation cost.

If the plant locates exactly at Mine A$\text{'}$s location, what is the equilibrium price that A will charge to take advantage of the plant's sunk investment? Assume the price must be a whole number.

$[$Reflecting on your answer, do you think the power plant would want to co$-$locate with Mine A or choose a different location? What location do you think would be the equilibrium choice for the power plant? No further answer is required; this is for your own reflection.$]$