There are five plots in a town that are suitable for locating gas stations. The nonland cost
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There are five plots in a town that are suitable for locating gas stations. The nonland cost (in annual terms) of developing and operating the first plot is $10,000. For the second plot, the cost is
$20,000, for the third plot, $30,000, and so forth.
a. If each location generates $100,000 in annual revenues, what is each plot’s economic rent? Is any plot marginal?
b. If each location generates $40,000 in annual revenues, what is each plot’s economic rent? Is any plot marginal?
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