The market price of a factor of production that is in fixed is determined only by demand.

Question

Quizplus · Accepted Answer

The market price of a factor of production that is fixed, such as land or natural resources, is determined solely by demand. This is because the supply of fixed factors cannot be easily increased or decreased, so their quantity supplied remains constant. As a result, any increase in demand for these factors will lead to an increase in their market price.

The Market Price of a Factor of Production That Is