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Business, 25.12.2019 02:31 vhuyrtyy

Consider a city of 200 people (100 rich and 100 poor) and two neighborhoods (100 people in each). both groups generally prefer to live with rich people and are willing to pay a premium for living with a fraction of rich people that is larger than 50%. poor people’s premium curve is given as p(poor)= 0.9x^2, where x is the percentage ofrich above 50% (e. g., if there are 52% rich, x will be 2). rich people’s premium curve is given by p(rich)= 35x-0.1x^2. what is the equilibrium outcome? explain.

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Consider a city of 200 people (100 rich and 100 poor) and two neighborhoods (100 people in each). bo...
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