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Bubba's Beers has won the beer concession for Coconut Grove Fair, This means that Bubba can locate one beer stand in the middle of a one-mile street, where fair takes place. The stand costs $120 to build and staff. He expects 3000 people per day (NV = 3000). each of whom wants to buy one beer, and has a maximum willingness to pay of $3. Assume that, when the thirst hits, consumers are evenly spread out along the midway. In addition to the price, consumers also experience disutility from having to walk to get the beer, at the (round-trip) rate of $2 per mile of distance to the nearest stand. Suppose that Bubba's marginal costs are constant and equal to $1.5 per beer. midway What is the optimal number of stands for Bubba? The optimal number of stands for Bubba is type yourStep by Step Solution
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