firm_location_model_A

# firm_location_model_A - Excel file consists of the...

This preview shows pages 1–4. Sign up to view the full content.

Excel file consists of the following worksheet: Firm Location Model 1 Model of Appendix 3 with given x and Q Firm Location Model 2 Model of Appendix 3 determining optimal Q with given x Firm Location Model 3 Model of Appendix 3 determining optimal Q and x

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Firm Location Model - Appendix to Chapter 3 Profit = TR -TC TR = PxQ If P=constant, firm is perfectly competitive. If P(Q) ["P depends on Q"], firm is "market powerful" - e.g., monopolistically competitive firm. P(Q) is the inverse demand curve. TC consists of three components eRQ=1.2RQ 12 cost of raw lumber wLQ 10 cost of labor Q(eax+b(z-x))=Q(eax+by)=Q(1.2ax+by) 270 transportation cost of raw lumber to pt. x and 292 TC Sample Parameter Values Q 10 At Arbitrary Q P 90 TR TC a 1 Profit 900 - 292 b 1 c 100 d -1 e 1.2 w 1 L 1 R 1 x 10 z 25 y 15 parameters of inverse demand curve
Q MR 0 100 1.2 1 27 5 90 1.2 1 27 10 80 1.2 1 27 15 70 1.2 1 27 20 60 1.2 1 27 25 50 1.2 1 27 30 40 1.2 1 27 35 30 1.2 1 27 40 20 1.2 1 27 45 10 1.2 1 27 transportation of logs from pt. x 50 0 1.2 1 27 55 -10 1.2 1 27 60 -20 1.2 1 27 65 -30 1.2 1 27 70 -40 1.2 1 27 608 75 -50 1.2 1 27 80 -60 1.2 1 27 85 -70 1.2 1 27

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern