Johnson trucking company wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area. it wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs. johnson trucking company has the following data available. month miles driven total operating costs january 16,200 $22,650 february 17,000 $23,250 march 18,200 $24,150 april 16,500 $22,875 may 17,400 $23,550 june 15,400 $22,050 using the high-low method, the fixed costs in a month are

Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers. firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?