Consider the following spatial example involving trade and the following five coun- tries: U.S. (u), Japan (j), Canada (c), England (e), and Russia (r). The inverse market demand functions for each country are:
pdu = 300 - 1qdu pdj = 275 - 1qdj pdc = 200 - 1qdc pde = 155 - 1qde pdr = 220 - 1qdr
Suppose the five countries have the following inverse supply functions:
psu = 30 + 1qsu psj = 75 + 1qsj psc = 20 + 1qsc pse = 15 + 1qse psr = 45 + 1qsr
Further assume the following unit transportation costs across all countries:
|
|
u
|
j
|
c
|
e
|
r
|
|
u
|
0
|
8
|
1
|
4
|
5
|
|
j
|
8
|
0
|
9
|
10
|
6
|
|
c
|
1
|
9
|
0
|
3
|
4
|
|
e
|
4
|
10
|
3
|
0
|
2
|
|
r
|
5
|
6
|
4
|
2
|
0
|
Write the spatial equilibrium mathematical programming model corresponding to this problem assuming perfect competition.