Bid-Rent Theory Definition
Bid-Rent Theory Definition. The bid rent theory is a geographical economic theory that refers to how the price and demand for real estate change as the distance from the central business. Is a geographical economic theory that refers to how the price and demand for real estate changes as the distance from the central business district (cbd) decreases.
The bid rent theory is a geographical economic theory that refers to how the price and demand for real estate change as the distance from the central business district (cbd). The theory of rent in microeconomics highlights that rent is considered a surplus, and it is not tied to land alone but also to labor, capital, and entrepreneurship. Bid rent function and the combination of several bid rent functions will define the rent gradient.