A power plant (PP) uses coal to produce electricity. It can buy coal from the Valley mine or the Raven mine. The PP can locate next to either mine....

A power plant (PP) uses coal to produce electricity. It can buy coal from the Valley mine or the Raven mine. The PP can locate next to either mine. The distance between the mines is 100 km. Both mines have MC = $2/ton. The PP can buy coal from either mine but the cost of transporting coal is $2/ton per 100 km. Assume the mines are Bertrand firms and the two mines produce an identical product. If the PP locates next to the Valley mine what is the profit-maximizing price for Valley to charge the PP?