Problem 3 (7 points) Tinyville is a town stretched along its only street, the 1-mile long Tinystreet. There is only one restaurant in town, Boxed Lunch, and it is placed halfway down Tinystreet. Calling it a restaurant may be a stretch since it's just a hole in the wall where you can buy lunch boxes with decent quality food, which customers value at $V. Assume that the restaurant wants to serve all hungry townspeople, but maximizes its profit given this constraint. People are distributed evenly along the street and traveling the length of the town and back would cost someone $t. The restaurant has started looking into hiring a delivery firm to take care of the delivery. Assume that there are multiple delivery firms nearby, so that competition drives down their prices. The delivery firms therefore only charge the cost of transportation from the restaurant and back (so that they can pick up another meal to deliver). Assume that delivery firms and townspeople have the same transportation cost. a) If Boxed Lunch does not offer home delivery, how should it set its price? Show graphically and explain. b) Say instead that Boxed Lunch would switch to only offering home delivery and offer no on-premise pickup. It would do this by paying the firm Drive Around, or its competition, for each delivery. To make things easier, assume that people order no more than one lunch box at a time. What price should Boxed Lunch set for its lunch box if it bundles food and delivery? Show graphically and explain. c) Would the restaurant prefer to bundle meal and delivery, and pay a firm the transportation cost, or should it have customers pick up the food themselves? Explain. d) If Boxed Lunch offers both the lunch box delivery at the price you stated in b), and the on-location pickup at the price you stated in a) how many people would pick the food up themselves and how many would choose delivery? Explain.