Consider a traditional nineteenth-century monocentric city with a CBD radius of one mile. In 1869, buildings at the edge of the CBD were four stories tall. In 1870, all the buildings in the CBD were destroyed by an earthquake, and the mayor of the city announced that the maximum building height in the rebuilt city would be four stories. In addition, business development will be confined to a circle with a one-mile radius, that is, the size of the CBD is fixed. Suppose that the city is small enough so that events in the city do not affect the equilibrium prices of its export goods (office or manufacturing goods).

A. Draw the business bid-rent function before the earthquake and label its R. Draw the business bid-rent function after the earthquake (with the height restrictions) and label its R*.