Suppose that there are two ice cream vendors on a beach which is represented by the 0-1 interval. Customers are uniformly distributed along that interval. The vendors simultancously select a position. Cus- tomers go to the closest vendor and split themselves evenly if the ven- dors choose an identical position. Each vendors want to maximize its number of customers. Which location should the vendors choose in the 0-1 interval, why?
Suppose that there are two ice cream vendors on a beach which is represented by the 0-1 interval. Customers are uniformly distributed along that interval. The vendors simultancously select a position. Cus- tomers go to the closest vendor and split themselves evenly if the ven- dors choose an identical position. Each vendors want to maximize its number of customers. Which location should the vendors choose in the 0-1 interval, why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![3. Suppose that there are two ice cream vendors on a beach which is
represented by the 0-1 interval. Customers are uniformly distributed
along that interval. The vendors simultaneously select a position. Cus-
tomers go to the closest vendor and split themselves evenly if the ven-
dors choose an identical position. Each vendors want to maximize its
number of customers. Which location should the vendors choose in the
0-1 interval, why?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcaa27e7e-907c-4061-9a59-8cfa07ca249e%2Fcc2b4391-3c18-491a-8293-0d294bd87861%2Forhxott_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. Suppose that there are two ice cream vendors on a beach which is
represented by the 0-1 interval. Customers are uniformly distributed
along that interval. The vendors simultaneously select a position. Cus-
tomers go to the closest vendor and split themselves evenly if the ven-
dors choose an identical position. Each vendors want to maximize its
number of customers. Which location should the vendors choose in the
0-1 interval, why?
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