1. Say we have two types of economic agents: manufacturing firms and households. For manufacturers, say output Q=12 units; transportation cost per mile per good is t=0.5; markup, p-c=1; lot size, L=1. At how far out, is the willingness to pay for land for manufacturing firms equal to zero? Draw and label the bid rent graph.

1. Say we have two types of economic agents: manufacturing firms and households. For manufacturers, say output Q=12 units; transportation cost per mile per good is t=0.5; markup, p-c=1; lot size, L=1. At how far out, is the willingness to pay for land for manufacturing firms equal to zero? Draw and label the bid rent graph.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.2P

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