Suppose That Firms Are Located in a Circle on an Island

question 22

Multiple Choice

Suppose that firms are located in a circle on an island. You are given transportation costs, fixed costs, variable costs, and demand (assume that customers are spread evenly along the circle) . As transportation costs on the island rise,

• A)the number of firms will rise in the long run.
• B)the number of firms will fall in the long run.
• C)the number of firms will stay the same in the long run.
• D)It is impossible to tell from the information given.

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Definitions:

Critical Thinking

The objective analysis and evaluation of an issue or situation in order to form a judgment.

Clinical Inference

The process of drawing conclusions about a patient's health status based on available data and professional judgment.

Cervical Spinal

Pertaining to the cervical region of the spine, which consists of the first seven vertebrae situated in the neck area.

Data Collection

The process of gathering and measuring information on variables of interest in an established systematic fashion.