Choose the best answer. Explain why it is the best answer. We care about the reasoning more than just having the right answer.

3. In a von Thunen model with homogeneous labor with subways and cars, an improvement in automobile speed (e.g. due to better roads) will . . .

A. Raise rents in the areas where the residents use cars, because these areas are more attractive now.

B. Raise rents in the areas where the residents use subways because landlords there feel less competitive pressure from the landlords in the automobile areas.

C. Reduce the number of people living in areas where people use cars because the price of housing is higher there.

D. None of the above.