Question
Suppose that landowners have the power to restrict xbar, the distance to the edge of the city, in orderto increase the land rent they earn.
Suppose that landowners have the power to restrict xbar, the distance to the edge of the city, in orderto increase the land rent they earn. Suppose that, with no restriction, the urban land rent functionis given by r = 100-x, where x is distance in blocks to the CBD. Suppose that agricultural landrent rA is equal to 10.
Compute the total rental revenue in the absence of any restriction by landowners. Remember that the total rental revenue is composed of total urban rent and total agricultural rent. In computation, assume that area beyond 100 is desert so that no rents are collected from there.
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