A firm that produces metal occupies four hectares of land. The firm produces 4 tons of output per day and sells its output at a price of $440 per ton. The firm does not engage in factor substitution as the price of land changes. Intra-urban transportation is on trucks, with a unit cost of $12 per ton per mile. The firmâs non-land cost is $560 per day. The firm exports its output via circumferential highway (i.e., beltway around the city); that is, it wants to be near the beltway.
(a) What is the firm's WTP for land and its bid rent per hectare the following distances from the beltway: 0 miles --- 2 miles --- 6 miles -- 10 miles --- 15 miles