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The Weber location model predicts that the outcome of firm's location choice to minimize costs is to move closer to the more expensive input source.

  1. The Weber location model predicts that the outcome of firm's location choice to minimize costs is to move closer to the more expensive input source. Given the following information, demonstrate how the firm can lower costs by moving closer to the more expensive input source. In addition, what is the marginal cost per mile away from source 1 and the marginal cost per mile away from source 2. (16 Points)
  • 2 Locations: A & B
  • A: &
  • B: &

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