Frims a and b are selling a homogenous product and are


Frims A and B are selling a homogenous product and are located 900 mile apart. The production cost per unit of output for firms A and B are $60 and $60. The transport costs per unit of output per mile for firms A and B are $2 and $2. How many miles from firm A's location is the market area boundary? Explain your answer in terms of Firm A and Firm B relative costs of production and transportation. One or Two sentence answer. Make a statement about both production and transportation costs.

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Business Economics: Frims a and b are selling a homogenous product and are
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