MGEC40H3 Study Guide - Midterm Guide: Bertrand Competition, Horizontal Integration, Naval Mine
26 Nov 2012
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Total time for this examination is 90 minutes: total marks = 80, this test has eight (8) pages , aids allowed: calculator, do not use pencil. If pencil is used then that portion of (question on) your exam cannot be considered for re-grading. Short answer problems (80 marks - various weights) Q1. (20 marks) suppose linesville is a linear (straight) town 40 kilometres in length with 100 people uniformly distributed over each kilometre. Each person has a demand for one video rental (per period) as long as the total rental cost is less than or equal to per unit. A person incurs transportation costs of sh. 15 per kilometre travelled to a store (two-way trip). Suppose each video rental firm has fixed costs of (per period) and marginal costs of per unit rented. Suppose two video rental firms decide to set up, one at either end of the town.
