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Francois and Angela are leaders of two neighboring countries. They both want businesses to locate in their countries. The price of real estate is the only determining factor for where the businesses l

Francois and Angela are leaders of two neighboring countries. They both want businesses to locate in their countries.

Francois and Angela are leaders of two neighboring countries. They both want businesses to locate in their countries. The price of real estate is the only determining factor for where the businesses locate. Consider that initially the demand for the two countries is the same ,000-0.05Qg and ,000-0.05Qf. To raise revenue, Angela proposes a tax on businesses of $1000. As her economic advisor, you are tasked with finding out how many businesses she will lose to her rival Francois if she imposes this tax. Since land is fixed, the price depends on how many businesses locate in a given country. In France supply is ,000+0.01Qf and ,000+0.05Qg. What are the before and after tax quantities in both countries? How many businesses will Angela lose to Francois?

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