acofino Restaurantsis a local company with a commissary on Hastings St, several food bars around Vancouver,...

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acofino Restaurantsis a local company with a commissary onHastings St, several food bars around Vancouver, and several foodtrucks that serve West Coast and Mexican inspired fare. Suppose thecompany has just been awarded an exclusive permit to serve theirfoodstuff along 500 metres stretch of Beach Ave during Vancouver’sCelebration of Lightfireworks. On any given night during thefirework show Tacofino expects that up to 10,000 visitors may wantto buy their “bahn tofu” tacos that they intend to sell from thefood trucks. They think that the Hotelling spatial model is a goodframework to make theirbusiness decision, and here are theirestimates: the taco’s reservation price is $9, a customer’s cost oftraveling along crowded Beach Ave is $8/km, and a truck costs $250to rent for one night. The cost of making tacos is flat ¢90 pertaco. 4. How many trucks will Tacofino put in the street on thenight of Celebration of Light? 5. What is the profit-maximizingprice ($ per taco)? 6. What profit will Tacofino expect to make ($per night)? 7. What would be the efficient number oftrucks(maximizing social surplus)

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GIVEN INFORMATION Tacofino expects 10000 Foodstuff 500 metres Reservation price 9 Cost of traveling 8kM Truck costs 250 Cost of making tacos 90 per taco REQUIRED 4 How many trucks will Tacofino put in the street on the night of Celebration of Light 5 What is the profitmaximizing price per taco 6 What profit will Tacofino expect to make per night 7 What would be the See Answer

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acofino Restaurantsis a local company with a commissary onHastings St, several food bars around Vancouver, and several foodtrucks that serve West Coast and Mexican inspired fare. Suppose thecompany has just been awarded an exclusive permit to serve theirfoodstuff along 500 metres stretch of Beach Ave during Vancouver’sCelebration of Lightfireworks. On any given night during thefirework show Tacofino expects that up to 10,000 visitors may wantto buy their “bahn tofu” tacos that they intend to sell from thefood trucks. They think that the Hotelling spatial model is a goodframework to make theirbusiness decision, and here are theirestimates: the taco’s reservation price is $9, a customer’s cost oftraveling along crowded Beach Ave is $8/km, and a truck costs $250to rent for one night. The cost of making tacos is flat ¢90 pertaco. 4. How many trucks will Tacofino put in the street on thenight of Celebration of Light? 5. What is the profit-maximizingprice ($ per taco)? 6. What profit will Tacofino expect to make ($per night)? 7. What would be the efficient number oftrucks(maximizing social surplus)