Imagine a beach with beachgoers evenly distributed throughout. It's a hot day and there are two ice cream vendors who start out far away from each other. They quickly discover that if they move closer to the center, they keep customers on their far side of the beach while poaching customers near their rival. Eventually, both vendors end up right next to each other in the middle of the beach. Which concept predicts the conclusion of this story?
A) rational ignorance
B) opportunity cost
C) diffuse costs and concentrated benefits
D) median voter theorem

Question

Quizplus · Accepted Answer

The conclusion of the story can be predicted by the median voter theorem, which states that in a two-candidate election, the median voter will ultimately determine the outcome. In this case, the two ice cream vendors are competing for customers and eventually end up located at the midpoint of the beach, where they can attract the most customers and maximize their profits. This is similar to how political candidates may move towards the center of the ideological spectrum to attract moderate voters and win elections.

Imagine a Beach with Beachgoers Evenly Distributed Throughout