An outward shift in the demand curve for land will
A)make previously zero-rent land profitable.
B)induce people to begin to use land more extensively.
C)force reductions in rents.
D)be accompanied by a shift in the supply of land.

Question

Quizplus · Accepted Answer

An outward shift in the demand curve for land indicates an increase in demand for land. This increase in demand will lead to a rise in the market price for land. Zero-rent land becomes profitable for use in such a situation. Therefore, choice A is the correct option. Choice B is incorrect because an increase in demand doesn't necessarily lead to more extensive use of land. Choice C is also incorrect because an increase in demand will lead to higher prices, meaning higher rents. Choice D is incorrect because the question is only referring to a shift in the demand curve and not the supply curve.

An Outward Shift in the Demand Curve for Land Will