What is the minimum consumer valuation

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Two firms with MC1 =10 and MC2 =12(each unit costs $10 for firm 1 and $12 for firm 2) are located at each end of a street of length 1. Consumers are uniformly distributed along this street and incur transportation costs TC = x2, where x is the distance they need to travel. Consumers desire at most one unit of the product that they value at V . What are the prices that these two firms will set?

What is the minimum consumer valuation that ensures the entire market is served?

Reference no: EM13885984

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