How many hot-dogs would japadog sell

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Reference no: EM132208544

Japadog is the pioneer of street vending in Vancouver. They are unique to Vancouver(they tried to branch outin New York but apparently failed) and they sell “Japanese-style” hot-dogsin the streets. They have a stand that serves a stretch of West Cordova. There’s only one licence, so they do not decide how many stands to open. One stand. On any given day Japadog expects that up to 100 visitors may want to buy their hot-dogs. They think that the Hotelling spatial model is a good framework to make theirbusiness decision, and here are their estimates: the dog’s reservation price is $9, a customer’s cost of traveling along West Cordova is $6/km, there are no fixed costs, the stretch of West Cordova they serve is 1 km long, and they have a stand right in the middle ofthatstretch. The cost of making the hotdogsis flat $6 per dog.

1. What is the profit-maximizing price ($ per hot-dog)?

2. How many hot-dogs(per day) would Japadog sell?

3. What profit will Japadog expect to make ($ per day)?

Reference no: EM132208544

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