The supply of land is considered to be perfectly inelastic, meaning that the quantity of land supplied remains the same regardless of changes in price. This is because the supply of land is fixed and cannot be increased or decreased in the short run.

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The Market for Land

Question 125

Multiple Choice

The market for land

A) has an elastic supply.
B) has a perfectly inelastic supply.
C) determines the equilibrium interest rate.
D) has an upward sloping supply curve.
E) has no equilibrium because both the demand curve and the supply curve are vertical.

Correct Answer: