Question: Consider a simple, homogeneous monocentric city with a circular shape. If the location rent premium at the center is $6,000 per year per acre, the

Consider a simple, homogeneous monocentric city with a circular shape. If the location rent premium at the center is $6,000 per year per acre, the rent at the edge of the city is $10,000 per year per acre, and the density is 2 persons per acre. Supposing that the annual transportation cost per person per mile of distance from the CBD is $200 (round-trip), and if the population increases by 10% (the size of the city and transportation cost do not change), what will be the new rent at the center of the city per year per acre?

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