Question
Refer to von-Thnen's model where a city's market reaches to the left and to the right. Assume customers' WTP is $1224 per unit of the
Refer to von-Thnen's model where a city's market reaches to the left and to the right. Assume customers' WTP is $1224 per unit of the good in question. The firm is competitive and its price equals marginal cost c=0; the market reach is x=6 to the left and x=6 to the right.
(1) What is the firm's marginal transportation cost?
(2) What is the rent at a distance x=14 from the city center?
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Economics of Money, Banking and Financial Markets
Authors: Frederic S. Mishkin
9th Edition
978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905
