Question

Consider a town with a single street of 1 km long with 3,000 people spread uniformly along it. Two
stores, 1 and 2, are located at the opposite ends of the street and sell the same product (store 1 is
locatedattheleftend).Thecostofwalkingist1 =$6perkmtostorelandt2 =S9perkmtostore2for each
consumer. The net utility of a consumer located at point x from buying a product at store 1 is U1(x) =
100 - pl - t1x, where pi is a price of the product at store i = 1,2. The net utility from buying at store 2 is
U2(x) = 100 - p2 - t2(1 - x). The average cost of the product for each store is c = 4.
(a) Assume that all consumers buy product from the sellers. Find the demand functions Di(p1,p2) and
the profit functions Ti(p1,p2) for each store i = 1,2 as functions of prices p1,p2.
(b) Find the equilibrium prices.

Answer 1

Answer:

answer is i 34 or 68 or 97 ok