Please answer the question.

In this question, we will ask whether the pass through of an import tariff into local prices is uniform across all locations (towns) within New Zealand. Suppose that New Zealand has a single port, which is located in Auckland. Local intermediaries (like transport operators) transport an imported product from Auckland port to the nal destination (towns, indexed by r). Intermediaries obtain the product at the port for a price of p\" + t. Here, 19\"\" is the world price of the product and t is a specic tariff on imports. Intermediaries incur a transport cost t(x,.), where xr is the distance of town 1" to Auckland port. The transport cost is increasing in the distance from Auckland. Thus, t'(xr) > 0. Intermediaries then sell the product to retailers in town 1" at a price pr. We conceptualize towns as local markets. The number of intermediaries n competing in each town 1\" is a decreasing mction of distance. In other words, there is more competition among intermediaries in towns closer to Auckland. Hence, n'(x,.)