The last time you went on a road trip, you noticed that there were several fast food outlets clustered near some freeway exits, but none at the others. Now that you are familiar with Hotelling's model, you know that the reason for this is:
A)zoning laws.
B)firms vying for a favorable location.
C)failure by the firms to correctly distribute themselves.
D)the existence of fast food cartels.

Question

Quizplus · Accepted Answer

Firms cluster in their effort to be nearest the customers.

The Last Time You Went on a Road Trip, You