Citys utility maximizing population

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Reference no: EM137106

Assume an urban cluster's income (I) is given by the function I=4N-0.05N2, where N denotes the cluster's population in million. The cluster's diseconomies of aggregation (C) are given by C=0.5N2.

(a) Calculate the city's utility maximizing population.

(b) At this population, how large is the resulting utility, how large is the cost?

Reference no: EM137106

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