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Consider a simple Hotelling city setup. There are two firms located...

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Consider a simple Hotelling city setup. There are two firms located...

Consider a simple Hotelling city setup. There are two firms located at either end of a street of length 
one mile (so, Firm 1 is at 0 and Firm 2 is at 1). 100 consumers are uniformly located along the 
street. Consumers bear a transportation cost of $t per unit of distance. Each consumer will buy 1 and 
only 1 unit of the good. The firms can produce the good at zero marginal cost. Denote Firm 1's price p1 
and Firm 2's price p2. 


a. Call x (where x must be between 0 and 1 inclusive), the location of the consumer who is 
indifferent between buying from Firm 1 and from Firm 2. Write down a formula for x. (Hint: it 
should have a p1 in it, a p2 in it, and a t in it!). 

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Answered by cyreluchi on coursehero.com
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<ul><li>sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultric</li><li>sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus e</li><li>sectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec al</li></ul>

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