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Suppose consumers are uniformly distributed on a circle of unit circumference, and two firms are located on opposite sides of this circle. Both firms produce

Suppose consumers are uniformly distributed on a circle of unit circumference, and two firms are located on opposite sides of this circle. Both firms produce the same product at zero cost. Each consumer incurs a cost of travel equal to the distance travelled. She purchases one unit of the good from the firm that offers the lowest full delivered price (that is the price plus the cost of travel)

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