Tham khảo tài liệu 'private real estate investment: data analysis and decision making_2', tài chính - ngân hàng, đầu tư bất động sản phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 4 Private Real Estate Investment Wheat Farmer 100f 80 s 60 ụ 40 20 0 1 2 3 4 5 6 7 Distance FIGURE 1-1 Wheat and pea farmers bid rent curve. 0 2 4 6 8 10 Distance distance from the center are all revenues exhausted Locating outside of that distance would produce negative revenue an economic consequence that prevents a user from locating there. Notice that given the inputs the wheat farmer can afford to locate farther away. Stated differently the pea farmer MUST locate closer in. Wheat farmer Pea farmer R pa w tap 0 R 10 10 - 50 - 5 10m 0 R 15 10 - 75 - 1 10p 0 m 10 Maximum distance m 7 5 Maximum distance By assuming an arbitrary value for m and solving for t we can determine the slope of each party s bid rent curve. Notice that the pea farmer s slope is greater. What does this mean to the way both parties will bid for land closer to the center of the city Wheat farmer R 10 10 - 50 - t 10 10 0 t 5 Slope of bid rent curve Pea farmer R 10 10 - 50 - t 10 7 5 0 t 1 Slope of bid rent curve Placing them both on the same plot is useful at this stage noting that the point where the curves cross is the point on the land where the bids are equal. Prior to that point the pea farmer is willing to pay the most for the land beyond that point the wheat farmer bids more than the pea farmer. Setting the two rent equations equal to each other inserting the fixed inputs and solving for m tells us the location on the land of the crossover point. Figure 1-2 shows the point on the land where both parties bid an equal rent and the amount of that rent. Why Location Matters 5 Distance FIGURE 1-2 Rent at the point where bids are equal. 10 10 - 50 - .5 10m 15 10 - 75 - 1 10m m 5 R 10 10 - 50 - .5 10 5 R 25 A little experimentation with different values for the fixed inputs leaves one with the insight that in our stylized example nothing matters but transportation cost. Mathematically this can be verified by taking the first derivative of R with respect to m with the quantity produced .