ECO333H1 Lecture Notes - Lecture 2: Hectare, Exogeny, Economic Equilibrium
Document Summary
These notes elaborate on a land-market model presented in o"sullivan"s textbook urban economics . The rectangular model is introduced in the section bid-rent curves for the. Manufacturing sector (pages 128-30, 8th edition, or 122-124, 7th edition, or 102- In that section"s figure 6-1, we see an equilibrium bid rent curve (= bid rent function, abbreviated here as brf). The brf shows zero- economic-profit land rents for manufacturing firms as a function of distance (x) from a highway. The zero-economic-profit condition is met when firms earn only the profit required to stay in business. The textbook discussion continues in a general equilibrium model of a. Monocentric city (pages 198-201, 8th edition, or 192-194, 7th edition, or 157-160, In figure 7a-3 we again see an equilibrium brf for manufacturing firms now labelled rb. (the b being for businesses that manufacture a product).
