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3. Suppose a city restricts the height of residential structures. The maximum height is four stories, the height that would normally occur five miles from

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3. Suppose a city restricts the height of residential structures. The maximum height is four stories, the height that would normally occur five miles from the city center. a. What should building height city look like without the restriction? What effect would the building height restriction have on landlord profits: at five miles from the city center, two miles from the city center and at the city center? b. Draw two bid-rent curves: One for the city without the restrictions, and one for the city with the restrictions. Explain why they look the way they do. Hint: First draw the bid-rent curve with any height restrictions, and label the point five miles from the center. Now think about how the height restrictions would affect the ability to substitute and what bid rents curves look like without substitution effects

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