Consider a manufacturing firm that occupies two hectares of land. The firm produces 10 tons of output per day and sells its output at a price of $80 per ton. The firm does not engage in factor substitution as the price of land changes. Intraurban transportation is on trucks, with a unit cost of $12 per ton per mile. The firm's nonland cost is $200 per day. The firm exports its output via circumferential highway (beltway). a. Draw the firm's bid-rent curve for land for different distances from the belt- way, from a distance of zero to five miles. b. The bid rent at the beltway is _____ per hectare and the slope of the bid- rent curve is _____ per mile, computed as . . . .

QUESTION:

Compute the Manufacturing Bid Rent

Consider a manufacturing firm that occupies two hectares of land. The firm produces 10 tons of output per day and sells its output at a price of $80 per ton. The firm does not engage in factor substitution as the price of land changes. Intraurban transportation is on trucks, with a unit cost of $12 per ton per mile. The firm’s nonland cost is $200 per day. The firm exports its output via circumferential highway (beltway).

(a). Draw the firm’s bid-rent curve for land for different distances from the beltway, from a distance of zero to five miles.

(b). The bid rent at the beltway is ______ per hectare and the slope of the bid-rent curve is ______ per mile, computed as…