Location Theory - Is the Bid Rent Curve Linear?
Location Theory - Is the Bid Rent Curve Linear?
The bid rent curve for a single user is often modeled as linear. An aggregate of users discloses that the curve is actually convex to the origin because only the portion above any particular crosspoint matters, making the bid rent curve at least piecewise linear. In the limit when the number of users is extremely large, the curve becomes a smooth exponential decay.