What is the primary pattern described by the bid-rent curve in metropolitan areas?

What is the primary pattern described by the bid-rent curve in metropolitan areas?

• A. Land value increases as distance from the CBD increases.
• B. Land value decreases as distance from the CBD increases.
• C. Land value is uniform regardless of distance.
• D. Land value peaks at intermediate distances then declines.

Answer: (B)

In metropolitan areas, land value is highest near the central business district and falls as you move away. This pattern comes from the bid-rent idea: businesses and households are willing to pay more to be closer to the heart of economic activity, where access to markets, workers, and services is best. Yet being farther out means higher transportation costs and reduced accessibility, so the amount people are willing to pay for land Drops with distance. Therefore, land value decreases as distance from the CBD increases. The other ideas don’t fit as well: land value increasing with distance would imply outer areas are more valuable, which contradicts central access advantages; a uniform land value ignores the clear gradient; and a peak at intermediate distances would miss the strong center-based concentration that drives the highest values near the core.

In metropolitan areas, land value is highest near the central business district and falls as you move away. This pattern comes from the bid-rent idea: businesses and households are willing to pay more to be closer to the heart of economic activity, where access to markets, workers, and services is best. Yet being farther out means higher transportation costs and reduced accessibility, so the amount people are willing to pay for land Drops with distance. Therefore, land value decreases as distance from the CBD increases.

The other ideas don’t fit as well: land value increasing with distance would imply outer areas are more valuable, which contradicts central access advantages; a uniform land value ignores the clear gradient; and a peak at intermediate distances would miss the strong center-based concentration that drives the highest values near the core.