Use the Following Information to Answer the Subsequent Questions

Use the following information to answer the subsequent questions. A simple monocentric city Roundville) has a population of 3,000,000 with a homogeneous density of 5 inhabitants per acre, and one person per household. Agricultural rents are $500/acre/yr, housing construction costs including developer profit) can be paid for with a perpetual loan charging interest of $5000/house/yr, and transportation costs are $250/person/yr per mile of distance from the center of the city. Recall that there are 640 acres per Mi².)
-What is the annual location premium rent per household in the center of Roundville?

A) $4,320.
B) $5,740.
C) $21,600.
D) $25,500.

Correct Answer:

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