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(1) Locations of Transfer-Oriented Firms Assume the distance between the resource (R ) and the market...

(1) Locations of Transfer-Oriented Firms Assume the distance between the resource (R ) and the market (M) is 10 miles. A firm’s procurement cost is given by PC=5x^2, where x is the distance from the resource measured in miles. The firm’s distribution cost is given by DC=100-0.2x^2. Again, x is the distance from the resource. (a) What is the PC, DC and Total Freight Cost at each milestone (i.e., x=0, 1, 2, 3, ...10). Where should the firm locate? (b) How does your answer to all parts under (a) change if the marginal procurement cost drops to PC=0.1x^2?

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