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**Unformatted text preview: **household located 8 miles from the city center occupies a dwelling with 1000 square feet at a monthly rent of $600. Non-land cost per dwelling is $250, and there are 10 houses per hectare. a. The (rental) price of housin g at a distance of 8 miles is ___ per square foot. Computed as… b. Suppose the rental income is the only revenue from land. The bid rent for land at a distance of 8 mile is ___ per hectare, as computed as … c. Assume that the demand for housing is perfectly elastic, the price of housing at a distance of 5 miles is ___ per square foot, computed as … d. Assume that housing firms do not engage in factor substitution. The bid-rent for land at a distance of 5 miles is ___, computed as… e. Suppose consumers engage in consumer substitution and firms engage in factor substitution. The bid rent at a distance of 5 miles will be [greater, less] than the number computed in part (d) because …...

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- Fall '17