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Age Sorting Consider a city of 200 people (100 aged and 100 young) and two neighborhoods...

Age Sorting Consider a city of 200 people (100 aged and 100 young) and two neighborhoods (100 people in each). People generally prefer to live close to aged people. To draw the rent-premium curves, put the number of aged people in neighborhood A (from 50 to 100) on the horizontal axis. The premium curve of aged people is concave from below, and in a neighborhood of 100 aged people, the premium is $30. The premium curve of young people is linear, and in a neighborhood of 100 aged people, the premium is $50. The two premium curves intersect at Aged 70, with the rent premium = $20

DRAW THE TWO PREMIUM CURVES

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