How are owners of land compensated

Question

Quizplus · Accepted Answer

Land owners are compensated according to the value of the marginal product of land, which is the additional revenue generated by using one more unit of land. This takes into account the productivity of the land as well as the demand for its output. Option A and B do not take into consideration the market demand for the output produced by the land, and option C only reflects the purchase price of the land without considering its productivity.

How Are Owners of Land Compensated