Originally posted by: QED
Ok.. new brain teaser/puzzle. This one is actually fairly simple, but has broad applications in everyday life:
You will generally find competing gas stations are usually very tightly clustered together within a neighborhood (in some areas it's not
uncommon to have 4 gas stations on each corner of a busy intersection!), instead of being equally spread out throughout the whole neighborhood. Some of this can be explained by zoning laws and the uneven distribution of people within an area, etc. But even in an ideal world (one with no zoning laws, all gas stations had the same cheap price, and people are evenly distributed across the neighborhood) gas stations would still cluster-- even though it would be better for consumers if they spread out so you wouldn't have to drive as far to get gas. Why is that?
I'll take a stab.
From a consumer level it's because it solves a distance problem w.r.t the retailers.
Mathematically, it allows the competitors a larger pool of customers.
Assume our topology is a circle, subdivided into quadrants, with population distribution being equal to all quadrants.
Also assume that consumers will always drive the shortest distance for a product.
Each of these quadrants has it's own gas station who's circle of influence spans only the quadrant itself, as consumers will only go to the closest merchant. That means that the circle of influence will be limited to the scope of the quadrant.
Now take all 4 individual stations, and place them as concentric circles about the "circle of the land" so to speak. Now each stations influence has increased to the entire "circle of the land" as drivers are willing to drive an equal distance to any of the stations.
Now all that remains is that the retailer differentiate their product, but the problem of having a larger pool of consumers has been dealt with.
Really just thinking it out loud. Is this what this semester of set theory has gained me? Tha ability to answer online riddles?