Consider a manufacturing firm that has revenues of $160 per day. The firm must transport its output to a central freight terminal. Transportation costs to get output to the central freight terminal are $20 per mile. The firm employs labour that costs $60 per day if employed at the central freight terminal location, but those daily labour costs fall at a rate of $4 per mile from center. The firm has other non-land costs of $30 per day to buy raw materials.The firm requires 2 hectares of land for its operations. a) What is the firm's maximum willingness to pay per hectare of land at the central freight terminal location? Show your work. b) What is the equation of the firm's bid ront
Consider a manufacturing firm that has revenues of $160 per day. The firm must transport its output to a central freight terminal. Transportation costs to get output to the central freight terminal are $20 per mile. The firm employs labour that costs $60 per day if employed at the central freight terminal location, but those daily labour costs fall at a rate of $4 per mile from center. The firm has other non-land costs of $30 per day to buy raw materials.The firm requires 2 hectares of land for its operations. a) What is the firm's maximum willingness to pay per hectare of land at the central freight terminal location? Show your work. b) What is the equation of the firm's bid ront
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:Consider a manufacturing firm that has
revenues of $160 per day. The firm must
transport its output to a central freight
terminal. Transportation costs to get output to
the central freight terminal are $20
The firm employs labour that costs $60 per
day if employed at the central freight terminal
location, but those daily labour costs fall at a
rate of $4 per mile from center. The firm has
other non-land costs of $30 per day to buy
raw materials.The firm requires 2 hectares of
land for its operations.
a) What is the firm's maximum willingness to
pay per hectare of land at the central freight
terminal location? Show your work.
b) What is the equation of the firm's bid rent
for land per hectare as a function of x, where
x is distance in miles from the central freight
terminal? Show your work.
per
mile.
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