In the Hotelling Model,what Effect Would an Increase in the Transportation

question 9

Multiple Choice

In the Hotelling model,what effect would an increase in the transportation cost t have on,in the first instance,a monopoly firm and,in the second instance,two firms located at the extremes of the line segment who compete over the marginal consumer?

• A)The monopolist's profit would decrease but the duopolists' would increase.
• B)Both monopolist's and duopolists' profits would increase.
• C)Both monopolist's and duopolists' profits would decrease.
• D)The monopolist's profit would increase but the duopolists' would decrease.

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Definitions:

Organisational Position

A role or rank within a structure that defines job duties, responsibilities, and the level of authority.

Special Assignments

Tasks or projects assigned to an individual or group that fall outside their regular duties, often requiring special skills or knowledge.

Reward Power

The ability to influence others by offering them something desirable in return for their compliance or performance.

Zero-Sum Quantity

A situation in which one party's gain is exactly balanced by another party's loss, typically in a competitive scenario.