Bart Wurst runs the only hot-dog stand in a large park in a large boring town.On Sundays people in this town all sit in the park and sunbathe.For any t between 0 and 30, the number of people who are sitting within t minutes of Bart's stand is 10t 2 .People in Bart's town are lazy and hate to walk.They think that every minute of walking they do is as bad as spending $.10.Everybody in the park has a reservation price of $1 for a hot dog, where the cost of a hot dog includes the subjective cost of walking as well as the money price they have to pay when they get there.(Nobody has ever thought of fetching a hot dog for someone else.)Find a formula for the demand curve for Bart's hot dogs.Explain how you got it.

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katrina saman · Accepted Answer

Final Answer : If Bart charges p, where 0    p    1, his extensive margin is the customers who are at distance t* from Bart where p    .10t*    1.Then t*    10    p and the demand for hot dogs at prices p is the number (10 2 p)2 of people within t* of Bart.

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