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Problem 3. Hotelling's model with fixed price [1 point] Consider Hotelling's model (consumers uniformly distributed over a street of length 1, linear transportation cost, infinite
Problem 3. Hotelling's model with fixed price [1 point] Consider Hotelling's model (consumers uniformly distributed over a street of length 1, linear transportation cost, infinite reservation price). Suppose there are two firms, the price of the product is fixed by the gov- ernment at $ 6 and firms can only choose where to locate. Assume that if many consumers are indifferent between the two firms, then half of them will go to firm 1 and the other half to firm 2. Assume zero production costs. Find a Nash equilibrium of this game. Are there many Nash equilibria
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