There are two sandwich shops, shop 1 and shop 2, that are 4 miles apart. All consumers of sandwiches live on the straight line connecting the stores. There are 10,000 consumers uniformly distributed on this line between the two stores. A consumer at point x on the line between store 1 and 2 is located x miles from store 1 and 4-x miles from store 2. Suppose each consumer has a transportation cost of $2 per mile. The cost including transportation cost for a consumer located at x to purchase from shop 1 is p₁+2x and the analogous price to purchase from shop 2 is p₂+2(4-x). Each consumer purchases one sandwhich from the shop with the lowest cost including transportation cost. Suppose both shops have the same marginal cost of each sandwhich equal to $3. When shop 1 picks p₁it takes as given p₂ Analogously, when shop 2 picks p₂ it takes p; as given. Suppose shop 1 thinks that shop 2 is going to set p₂-$13. What is the optimal price for shop 1 in this this case? 12 Suppose shop 1 thinks that shop 2 is going to set p₂-$12. What is the optimal price for shop 1 in this this case? Thank through why neither of these is an equilibrium of price competition between the two shops. In the Nash equilibrium of this game, both firms set price equal to 11

N=2 video broadcasting websites, You and Twi, must decide the number of minutes of ads to be displayed for every video that the user elects to watch. Let tY be the number of ad-minutes per video set by You, and tT the number of ad-minutes per video set by Twi. Streaming one video costs You cY=0.02, while it costs Twi cT=0.03. There are 100 million potential users, and each watches videos according to the following demand curves: qY((tY,tT) =10-2tY+tT=10-2tT+tY  a- What is the cross-price elasticity between You and Twi? b- Suppose, for now, that You and Twi enter an (illegal) agreement by which they set tY=tT=t  Derive the total number of users in the market as a function of t. Derive the profits for each website as a function of t. c- Now let the two platforms compete by each setting their number of ad-minutes: i. What is the best reply of You? What is the best reply of Twi? ii. Find the Nash Equilibrium of the game. iii. How many total users choose You and how many total users choose…

Julia and Ralph need to decide which one of them will take time off from work to complete the rather urgent task of pruning their trees. Julia is pretty good with a pole saw; she can prune the trees in 1 hour. Ralph is somewhat slow; it takes him 6 hours to prune the trees. Julia earns $120 per hour as a business consultant, while Ralph earns $15 per hour as a lifeguard.Keeping in mind that either Julia or Ralph must take time off from work to prune the trees, who has the lowest opportunity cost of completing the task?

Neha and Lorenzo need to decide which one of them will take time off from work to complete the rather urgent task of digging postholes for their new fence. Neha is pretty good with a post auger; she can dig the holes in 30 minutes. Lorenzo is somewhat slow; it takes him 5 hours to dig the holes. Neha earns $110 per hour as a personal trainer, while Lorenzo earns $25 per hour as a clerk. Keeping in mind that either Neha or Lorenzo must take time off from work to dig the holes, who has the lower opportunity cost of completing the task?   a) Neha and Lorenzo face identical opportunity costs   b)Neha   C)Lorenzo