Which of the following best describes the bid rent theory as used in AP Human Geography?

• A. It explains how the price and demand for real estate change as the distance from the central business district increases.
• B. It is a theory that predicts the distribution of population based on climate and natural resources.
• C. It describes how governments set minimum prices for agricultural products to support farmers.
• D. It states that the value of land is determined solely by its physical characteristics.

Answer: (A)

Verified step by step guidance

1. Recognize that the bid rent theory is a concept used to explain how land prices and demand vary with location, particularly in relation to a central point such as a central business district (CBD).
2. Understand that the theory suggests land users are willing to pay different amounts (bid rents) for locations depending on their distance from the CBD, with prices generally decreasing as distance increases.
3. Identify that this theory helps explain urban land use patterns, such as why commercial activities cluster near the CBD where land is most expensive, while residential or agricultural uses are found further away where land is cheaper.
4. Compare the given options to the core idea of the bid rent theory, focusing on the relationship between real estate price, demand, and distance from the CBD.
5. Conclude that the option stating 'It explains how the price and demand for real estate change as the distance from the central business district increases' best captures the essence of the bid rent theory.