There is a road named High Street with 800m long. There are two grocery shops: Woolworths located at the left end and Coles located at the right end. 4800 customers are uniformly distributed along High Street. To make our life easier, assume both grocery stores sell the same product, and consumers demand just one unit of the product. Traveling to a grocery shop is costly, and the cost of traveling is 4 cents per meter. Suppose the price of the product is $10 at Woolworths, and $12 at Coles. Then customers will purchase the product from Woolworths.

There is a road named High Street with 800m long. There are two grocery shops: Woolworths located at the left end and Coles located at the right end. 4800 customers are uniformly distributed along High Street. To make our life easier, assume both grocery stores sell the same product, and consumers demand just one unit of the product. Traveling to a grocery shop is costly, and the cost of traveling is 4 cents per meter. Suppose the price of the product is $10 at Woolworths, and $12 at Coles. Then customers will purchase the product from Woolworths.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 3TY

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