A landlord will supply his or her land for rental only if in equilibrium

Question

Quizplus · Accepted Answer

A landlord will only supply his or her land for rental if he or she is paid at least the opportunity cost of using the land himself or herself. This means that the landlord must receive enough rent to compensate for the income he or she could have earned by using the land in another way, such as farming or building. If the landlord cannot earn at least the opportunity cost, it would be more profitable to use the land for his or her own purposes instead of renting it out.

A Landlord Will Supply His or Her Land for Rental