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Economics:

10th Edition
BOYES + 1 other
ISBN: 9781285859460

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BuyFindarrow_forward

Economics:

10th Edition
BOYES + 1 other
ISBN: 9781285859460
Textbook Problem

Urban sprawl is described as the establishment of housing and commercial development increasingly far from the city center. What might be the effect on sprawl ¡fit was the policy of a city to build the infrastructure—sewers, power, and other essential services— to these developments at the average cost to the city? If it built the infrastructure at the marginal cost to the city?

To determine

Effect of urban sprawl on city prices.

Explanation

City infrastructure is more expensive than the one which farther. This is because when considering the city, the distance is greater and population is less dense. At the same time, large projects like this experience economies of scale, meaning that the average total cost is decreasing in the relevant range of demand...

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