Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 37

Suppose that all operators of fast-food restaurants must rent the land for their establishments from other landowners. All other aspects of the costs of fast-food establishments are identical. Why would rents differ among fast-food locations? Would these differences in rents necessarily cause differences in the prices of fast food? What do you make of the claim by Mr. Z that ''I simply can't make a go of my McDonald's franchise on the interstate- the landowner just wants too much rent''?