The elasticity of supply of land is zero.A tax on land results only in an income effect to landlords.It then follows that a 10 percent tax on land rents will:

Question

Quizplus · Accepted Answer

Since the elasticity of supply of land is zero, the tax will be paid entirely by landlords, and there will be no excess burden as the burden cannot be shifted to consumers or reduced production. Therefore, both option (b) and (c) are correct.

The Elasticity of Supply of Land Is Zero