Question

What Shape does the bid-rent function exhibit if the demand for housing is price-elastic and t = constant (part 1)

a) linear

b) convex

c) concave

d) undetermined

What Shape does the bid-rent function exhibit if office firms want to be in contact with each other and t = increasing (part 2)

a) linear

b) convex

c) concave

d) undetermined

What Shape does the bid-rent function exhibit if manufacturing firms do not engage in factor substitution and t = increasing (part 3)

a) linear

b) convex

c) concave

d) undetermined

Answer 1

Answer.

PART 1

The bid-rent function exhibit if the demand for housing is price-elastic and t = constant moves in a linear form. ie, a straight line.

The Bid Rent increases at an increasing rate with constant time period.

PART 2

The bid-rent function exhibit if office firms want to be in contact with each other and t = increasing also moves in a linear form. ie, a straight line.
The Bid Rent increases at an increasing rate  ie. slopes up ever more quickly as the time is increasing.

PART 3

The bid-rent function exhibit if manufacturing firms do not engage in factor substitution and t = increasing moves in a concave shape.

Hope I have answered your question correctly. Keep studying. Have a nice day.