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Consider Hotelling's model with a street of length 1; consumers uniformly distributed along the street; and...

Consider Hotelling's model with a street of length 1; consumers uniformly distributed along the street; and each consumer has a transportation cost equal to 2d, where d is the distance traveled. Suppose there are two gas stations, one located at 1/4 and the other located at 1.
(a) Calculate the demand functions for the two firms.

Assume that production costs are zero (so that firms maximizing profits is equivalent to firm maximizing revenue). Assume that the two gas stations compete in prices and settle at a Nash equilibrium.
(b) Calculate the price that each firm will charge for gasoline.

(c) Observe if the prices charged by both firms are the same or different

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