Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right. At the extreme right end, all 100 voters lie to the left. 
Suppose Candidate X is running against Candidate Y. If Candidate Z enters the race:
A. all of the voters who were going to vote for Y will now vote for Z.
B. X will win because Y and Z will be competing for the same voters.
C. approximately half of the voters who were going to vote for X will now vote for Z.
D. most of the voters who were going to vote for Y will now vote for Z.
Answer: D
You might also like to view...
According to research, after the Tax Reform Act of 1986, the effective marginal tax rate on equipment has
A. decreased substantially. B. stayed basically the same. C. increased. D. decreased slightly.
An increase in a country's saving rate permanently raises its productivity
a. True b. False Indicate whether the statement is true or false
National income accountants compare the market value of the total outputs in various years rather than actual physical volumes of production because
What will be an ideal response?
A firm that faces the duopolists' dilemma can avoid the dilemma by:
A. telling customers that it will match any competitor's price. B. undercutting its competitor's price. C. agreeing to join a cartel. D. always choosing its dominant strategy regardless of the other firm's action.