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Ethanol Plant Location Choices<br />
Location decision is represented as:<br />
Zi = g(Mi , Li , Ii , Pi , Fi )<br />
Which represents an indirect cost function:<br />
( ) = ( − )<br />
i i<br />
i i −1<br />
l l<br />
q , w<br />
, p;<br />
α,<br />
θ q w α θ p<br />
∑ ∑<br />
k k<br />
i<br />
C m m<br />
m k<br />
l ( i,<br />
j)<br />
• This cost function is not directly observed<br />
but it is assumed that firms engage in cost<br />
minimization
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