Question

Questions 22-24 rely on the following prompt: Two street vendors (Vendor 1 and Vendor 2) with mobile carts produce the same good which they sell at the same price. Customers are located along a linear boardwalk with six locations (Location A through Location F), with a different number of customers in each location, as pictured below: А E 12 16 58 So, there are X customers in location A, 4 in B, 12 in C, 4 in D, 16 in E and 58 in F. There are 98 + X customers total. Customers will make a purchase from whichever vendor is closest to them, and equally close customers will be split evenly between Vendor 1 and Vendor 2. The vendors CAN locate in the same location (so, both could locate in location A, for example). 22. If X = 12, where will Vendor 1 locate in equilibrium? a. A b. B d. D نهه نه 23. If X= 12, where will Vendor 2 locate in equilibrium? هر ني c. c d. D e. E 24. What is the smallest value of X that would make (D, D) an equilibrium?

Answer 1

IF X=12, there is a total of 98+12=110 customers. The majority 58 of them are at F. So, being at F maximizes the chance of sale. So, both will be at F

22> 23> f. F

24> If (D,D) is an equilibrium, it means for the minimum x,

X+8+12+4=16+58

x=50

Thus, the smallest value would be 50.