Posted by **eStone** on Tuesday, May 5, 2009 at 10:04pm.

Consider a monocentric city in which the cost of commuting is $10 per mile per month. A household located eight miles from the city center occupies a dwelling with 1,200 square feet at a monthly rent of $600. Nonland cost per dwelling is $200, and there are four houses per acre.

a. What is the price (per square foot) of housing at u = $8? What is the bid rent at u = $8?

b. Assume that the demand for housing is perfectly inelastic. What is the price of housing at u = 5?

c. Assume that housing firms do not engage in factor substitution. What is the bid rent at u = 5?

d. How do the answers to (b) and (c) change if the demand for housing is price-elastic and firms engage in factor substitution? Would the prices of housing and land be larger or smaller?

## Answer This Question

## Related Questions

- Accounting 5 - Bethany Link delivers parts for several local auto parts stores. ...
- Accounting Please help me - Bethany Link delivers parts for several local auto ...
- Springdale - If my food budget is $200 per month and it represents 40% of my ...
- math - Two stations, A and B, are located six miles apart on a railroad. The ...
- calc - A train travels from city A to city B. The cities are 600 miles apart. ...
- Quantitative Methods II - The monthly income of residents of Daisy City is ...
- Trigonometry- Help! - After one hour in flight, an airplane is located 200 miles...
- Math I Have no idea PlEASE help me - Wind can affect the speed of an airplane. ...
- Quantitative Methods - The monthly income of residents of Daisy City is normally...
- math check - 1.)Jenna earns $16,250 per year. She pays 6% of her earnings to her...

More Related Questions