Describe the location of firms and equilibrium , Basic Statistics

Assignment Help:

Take the Hotelling's location model (the linear city) discussed in class for the case in which all firms are required to charge the same fixed price. Further assume that firms choose their location sequentially (i.e. firm 1 moves first, followed by firm 2 etc.).

For simplicity make the following two assumptions:

1. Firm n knows the location of all n-1 firms that have already choose their location.

2. Firms can fully anticipate the number of firms that will (eventually) participate in the market.

(a) Describe the initial location of two firms and explain why these locations constitute an equilibrium location.

[Note: an 'equilibrium location' is the situation in which no firm wishes to relocate given the choice of all other firms.]

(b) Describe the initial location of three firms and explain why these locations constitute an equilibrium location.

(c) In the case of three firms, what happens to the intensity of direct-to-consumer spending and detailing for the first firm to enter the market as a function of entry? (i.e. how does firm 1 alters their DTCA and detailing expenditure when firm 2 enter and then when firm 3 enters the market?)

 


Related Discussions:- Describe the location of firms and equilibrium

Characteristics, explain the characteristics of statistics

explain the characteristics of statistics

Frequency distribution, hey goo day, i wanna know the definition of frequen...

hey goo day, i wanna know the definition of frequency distribution and how to conduct it like in examples?

Probability, There are 49 mice in a pet shop. 30 mice are white. 27 mice ...

There are 49 mice in a pet shop. 30 mice are white. 27 mice are male. 18 mice have short tails. 8 mice are white and have short tails. 11 mice are male and have short tails.

What is the margin of error, The National Quality Research Center at the Un...

The National Quality Research Center at the University of Michigan provides a quarterly measure of consumer opinions about products and services (The Wall Street Journal, February

Sample space of an experiment, 1.The resumés of 2 males applicants for a co...

1.The resumés of 2 males applicants for a college teaching position in chemistry are places in the same file as the resumés of 2 female applicants. Two positions become available a

#titlelinear regression.., regression line drawn asY=C+1075x,when x was 2,a...

regression line drawn asY=C+1075x,when x was 2,and y was239,given that y intercept was11.calculate the residual.

Case study, A survey was conducted among the residents of Pune City, its su...

A survey was conducted among the residents of Pune City, its suburbs and the PuneCantonment area. The following three pie diagrams show their respective preferences for living in C

Track Software, Seven years ago, after 15 years in public accounting, Stanl...

Seven years ago, after 15 years in public accounting, Stanley Booker, CPA, resigned his posiition as Manager of Cost Systems for Davis, Cohen, and O''''Brien Public Accountants and

Chi-square Test, six subjects were exposed to 4 treatments and the followin...

six subjects were exposed to 4 treatments and the following data were recorded

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd