Exercise 1.3 Suppon that a dewekper hoosing temants for a shopping oter. T'here are for posible tenante a departmmt stom, a toy tore, a shoe stoen, and a hardware store. If each ntore we to be keated in isolation outakde a shopping omter il would earm a certain level of gros profit per period (this the level of peulit befure wattrneting out span rent). In addilkn, ench tore require a certain nber of mpuure foet of foor spae, which i the same ogudles of whether or not it koates in opping onter. The relevant valan for h tare lype a fulkw Gn peolit in impil uam б Ilation Thpartment ta "Tuy stoe She stom IHardwn stor SI00,00 $1,00 $7,N00 17,00 1,000 1,100 Whem the stores are located togther ah stom eamsagenter gm prolit from the additional customer tralle generated by the nearty locations of other stoees. The incree in gom prodi for eh tore type ("alfocted stom type") resulting from the premee of other stoen types ("added tore type") fllw Adll stom lype Shoe Hardware SI00 S00 Afleted stom type Deparimem Thy Shoe Departand Thy вадо $2000 Sидо0 S00 Hantware S00 Suppen that the shopping onter develper chargs a rent egal to ench storels gro prodit, laving the tore with t prolit of atly wm. Tatal wat from the shopping omter un oqual to the tetal gron pelit of ull ita stoe. The devkaper' pealit is ths equal to total gr peolit of all loren in the omter mitn thn eet of peviding paee). Pinally, mppene that, owing to high quality cmtrution and thn ned to provide eummon pan arond the stemm, the constructiom cet for the shupping onter spce in high. In partienlar, mppo thal the ont per perid per squa foot of store foot npe i SI0. (a) Gim an intuitive explanation for the pattern of incremntal proita from the prnoe of other storee in the nd tahle abom. (b) Suppose the dewekper were to contrut a ingle tore shoppingE center (a contrndiction in terms, perhape). There am four types of mch centers (a degartment stom alonn, a tey stom akonn, and so on). Using the information abom, compute the devekopee's peufit from cah of these fer typen of onten. (e) Next comprate the dreloper'n profit from the various typen of twstere shopping centers (le, degartment steen plan nhoe ntoen, department stere plus tey stem, and on, how many pnitilitin are thee) (4) Pinally, eompute prodita form the varkn typen of thren tore mdes and from the singde type f four-tom tew. (e) Comparing your anwem from (b), (e), d d), identily the optimal shopping emter (the cnn yelding the hight penfit to the developer). Kixplain intultively why thi partiealar electim f ste is ptimal.

Question

part a, b, and c

Exercise 1.3
Suppon that a dewekper hoosing temants for a shopping oter. T'here are for posible tenante
a departmmt stom, a toy tore, a shoe stoen, and a hardware store. If each ntore we to be keated
in isolation outakde a shopping omter il would earm a certain level of gros profit per period (this
the level of peulit befure wattrneting out span rent). In addilkn, ench tore require a certain
nber of mpuure foet of foor spae, which i the same ogudles of whether or not it koates in
opping onter. The relevant valan for h tare lype a fulkw
Gn peolit in impil uam
б
Ilation
Thpartment ta
"Tuy stoe
She stom
IHardwn stor
SI00,00
$1,00
$7,N00
17,00
1,000
1,100
Whem the stores are located togther ah stom eamsagenter gm prolit from the additional
customer tralle generated by the nearty locations of other stoees. The incree in gom prodi for
eh tore type ("alfocted stom type") resulting from the premee of other stoen types ("added
tore type") fllw
Adll stom lype
Shoe Hardware
SI00
S00
Afleted stom type
Deparimem
Thy
Shoe
Departand
Thy
вадо
$2000
Sидо0
S00
Hantware
S00
Suppen that the shopping onter develper chargs a rent egal to ench storels gro prodit, laving
the tore with t prolit of atly wm. Tatal wat from the shopping omter un oqual to
the tetal gron pelit of ull ita stoe. The devkaper' pealit is ths equal to total gr peolit of all
loren in the omter mitn thn eet of peviding paee). Pinally, mppene that, owing to high quality
cmtrution and thn ned to provide eummon pan arond the stemm, the constructiom cet for
the shupping onter spce in high. In partienlar, mppo thal the ont per perid per squa foot
of store foot npe i SI0.
(a) Gim an intuitive explanation for the pattern of incremntal proita from the prnoe of other
storee in the nd tahle abom.
(b) Suppose the dewekper were to contrut a ingle tore shoppingE center (a contrndiction in
terms, perhape). There am four types of mch centers (a degartment stom alonn, a tey stom
akonn, and so on). Using the information abom, compute the devekopee's peufit from cah of
these fer typen of onten.
(e) Next comprate the dreloper'n profit from the various typen of twstere shopping centers
(le, degartment steen plan nhoe ntoen, department stere plus tey stem, and on, how many
pnitilitin are thee)
(4) Pinally, eompute prodita form the varkn typen of thren tore mdes and from the singde type
f four-tom tew.
(e) Comparing your anwem from (b), (e), d d), identily the optimal shopping emter (the cnn
yelding the hight penfit to the developer). Kixplain intultively why thi partiealar electim
f ste is ptimal.

Image Transcription

Exercise 1.3 Suppon that a dewekper hoosing temants for a shopping oter. T'here are for posible tenante a departmmt stom, a toy tore, a shoe stoen, and a hardware store. If each ntore we to be keated in isolation outakde a shopping omter il would earm a certain level of gros profit per period (this the level of peulit befure wattrneting out span rent). In addilkn, ench tore require a certain nber of mpuure foet of foor spae, which i the same ogudles of whether or not it koates in opping onter. The relevant valan for h tare lype a fulkw Gn peolit in impil uam б Ilation Thpartment ta "Tuy stoe She stom IHardwn stor SI00,00 $1,00 $7,N00 17,00 1,000 1,100 Whem the stores are located togther ah stom eamsagenter gm prolit from the additional customer tralle generated by the nearty locations of other stoees. The incree in gom prodi for eh tore type ("alfocted stom type") resulting from the premee of other stoen types ("added tore type") fllw Adll stom lype Shoe Hardware SI00 S00 Afleted stom type Deparimem Thy Shoe Departand Thy вадо $2000 Sидо0 S00 Hantware S00 Suppen that the shopping onter develper chargs a rent egal to ench storels gro prodit, laving the tore with t prolit of atly wm. Tatal wat from the shopping omter un oqual to the tetal gron pelit of ull ita stoe. The devkaper' pealit is ths equal to total gr peolit of all loren in the omter mitn thn eet of peviding paee). Pinally, mppene that, owing to high quality cmtrution and thn ned to provide eummon pan arond the stemm, the constructiom cet for the shupping onter spce in high. In partienlar, mppo thal the ont per perid per squa foot of store foot npe i SI0. (a) Gim an intuitive explanation for the pattern of incremntal proita from the prnoe of other storee in the nd tahle abom. (b) Suppose the dewekper were to contrut a ingle tore shoppingE center (a contrndiction in terms, perhape). There am four types of mch centers (a degartment stom alonn, a tey stom akonn, and so on). Using the information abom, compute the devekopee's peufit from cah of these fer typen of onten. (e) Next comprate the dreloper'n profit from the various typen of twstere shopping centers (le, degartment steen plan nhoe ntoen, department stere plus tey stem, and on, how many pnitilitin are thee) (4) Pinally, eompute prodita form the varkn typen of thren tore mdes and from the singde type f four-tom tew. (e) Comparing your anwem from (b), (e), d d), identily the optimal shopping emter (the cnn yelding the hight penfit to the developer). Kixplain intultively why thi partiealar electim f ste is ptimal.

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