Question

onsider the spatial distribution of factories shown in Figure 5–4. The distance between city M and city C is 1 km, and the distance between city C and city D is 7 km. Mr. Fixit is currently in city M and is considering relocating. The urban development agency in city M will develop a subsidy plan to keep Mr. Fixit in the city. Suppose that Mr. Fixit’s cost per mile of travel is $2.

1. To prevent a move from city M to city C, the minimum weekly subsidy is $. . . .
2. To prevent a move from city M to city D, the minimum weekly subsidy is $ . . .

Answer 1

a) To prevent the move Mr Fixit should atleast be compensated for his daily cost of traveling

His cost per mile is $2.

He is traveling for 1 km from city M to C twice for 7 days(we are considering all the days of the week )

So he is traveling a distance of 14 km at a cost of $2 per mile

1 km =1.609 mile

14 km = 22.526 miles

Cost for 1 mile is $2.

Cost for 22.526 mile is $45.052

So minimum subsidy should be $45.052

b) similarly the distance between city M and D is 8 km (distance from M to C and distance from C to D).

16 km = 25.74 miles

Cost per mile is $2.

Total cost or minimum subsidy provided=$ 2*25.74*7= $51.49*7 =$360.43 per week