Introduction to Economics 1 Deneme Sınavı Sorusu #829701

Why does land have a perfectly inelastic supply?


Due to the law of diminishing returns.

Because the aggregate quantity of land is fixed.

Because production cost of land is zero

Because the economy has too much land.

Because the land is a "free gift of nature".


Yanıt Açıklaması:

What separates Land market from the other production markets is its unique feature related to quantity supplied. The quantity is fixed, thus the household’s choices cannot change the quantity supplied. That gives us perfectly inelastic supply curve (S) of land (in both the short run and the long run).

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